What will happen to the energy industry after the war in Ukraine?

The war in Ukraine has caused major changes in the energy industry, with implications for both traditional and renewable sources. As Europe reduced its reliance on Russian oil and gas, suppliers of liquid natural gas such as the US, Australia, and Qatar, have seen revenues soar. Investment in LNG technologies has increased and will likely continue to do so, so that these countries can export larger quantities.

This article will review some other solutions that Europe and other regions are looking to develop in the years ahead.

Reduced Reliance on Russian Energy Sources

Approximately 34% of Europe’s gas supply in 2021 came from Russia, as did 31% of its oil. The continent’s energy supplies are secure this winter; in November 2022, the International Energy Agency said that stores are at 95% capacity. This was due to stable exports from Russia earlier in the year, as well as a reduction in China’s LNG imports, which allowed Europe to make use of it instead.

The situation this time next year may be very different, so it will be crucial that Europe finds alternatives. The REPowerEU plan to make the EU independent from Russia’s energy considers Egypt and parts of West Africa to be potential candidates along with the US and the Middle East.

To make up for the halted exports of oil and gas to Europe, Russia looked elsewhere, and India, China, and Turkey have increased their purchases of Russian oil. (However, India and China have also increased their investment in renewables, with China intending to reduce carbon-heavy fuels by 20% by 2025.)

A Future with Zero Russian Gas Imports

While there are many unpredictable variables relating to the war itself, such as its duration, the World Economic Forum modelled a scenario in which Europe stops importing Russian gas completely from 2025 onwards.

In once instance, the model examined the effects of reducing Russia’s gas supply by 80% in 2023, down to 100% in 2025. When taking into account the increased gas prices, the model indicated higher electricity prices; specifically, 2024 prices were up by 12% compared to when running the model with no changes in the amount of gas supplied by Russia.

It was also suggested that bioenergy will make up for 20% of the reduction in Russian gas. In fact, the biofuels market is projected to grow by a CAGR of 7% between now and 2027 (speaking of which, our commodity trading system supports biofuels trading.)

The Accelerated Adoption of Renewables in Europe

The European Union has mandated the acceleration of the energy transition in order to reduce reliance on Russia, since it’s not possible for other suppliers such as Norway to increase their output to meet the demand.

How quickly these changes will occur remains to be seen, but we can expect an increase in solar power in Germany, heat pumps in France, and wind and nuclear in various countries.


In 2021, nuclear power accounted for 25.1% of electricity produced in the EU. Attitudes towards nuclear among European nations have long been divided, and the fact that Ukraine’s power plants were taken over by Russian forces added to safety concerns.

However, there is pressure for those countries who were planning to withdraw from nuclear power to postpone.

Germany was due to phase out this power source by the end of 2022, but will continue operations into 2023 to ensure that there is an emergency reserve. Belgium postponed by 10 years in order to assure energy security further into the future.

On the other hand, nations that already had plans to adopt nuclear have decided to speed things up; for example, Poland should have nuclear power by 2033 with construction due to start in 2026.

Overall, nuclear is not going to be the go-to replacement for Russian energy sources.

Energy Production in Ukraine

40% of Ukraine’s energy infrastructure has been damaged and the government has stated their intentions to use renewables more actively, including solar, wind, hydroelectric power, and hydrogen. The priority now is to repair the 90% of wind farms and 50% of solar facilities that have been affected.

Green Hydrogen

The green hydrogen market has grown considerably since its emergence, and this growth is going to accelerate to staggering degrees.

In 2021, the global green hydrogen market was valued at approximately £185.8 million and is projected to reach around £88.9 billion by 2031, at a CAGR of 68.9%. Europe is the most prominent player in the market; other regions include the UK, North America, China, and Asia-Pacific.

While the majority of uses of hydrogen at the moment are not green – and while there are several challenges to overcome such as the high cost of production – promising developments are underway.

For example, Air Liquide is intending to launch a large scale renewable hydrogen production project upon the European Commission’s approval. In addition, The first British large-scale green hydrogen production facility is on its way thanks to the partnership of Air Products and Associated British Ports.

Germany has also taken steps forward, launching a hydrogen refuelling system for trains in Bremervörde , which has the potential to go green in future.

In Summary

The war has furthered progress towards zero emissions agendas. Various alternatives to gas – renewable and otherwise – are seeing growth, from LNG to hydrogen to solar. Belgium and Germany have delayed their nuclear withdrawal plans, and Poland is on track to have nuclear power by 2033.

Ukraine itself intends to hasten the adoption of renewables as well as repair its damaged infrastructure. As well as looking to renewables, Europe continues to search for alternative suppliers of oil and gas, and green hydrogen appears to have a promising future.

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