Over the last year Russian President Vladimir Putin has shown how desperate he is to maintain control over the energy infrastructure of Eurasia.
As a result of Russian Military aggression in the Baltic region a revolutionary wind mega- project off the coast of Sweden had to be scrapped.
This is highly counterproductive.
The Swedish government was not shy when it came to spelling out why the Blekinge Offshore 2GW project was denied a permit to begin construction; they are responding to what they see as a direct military threat from Russia.
With nuclear warships stationed in the Russian waters off of Kalingrad just 200 miles away from the site of the proposed wind farm, it is not difficult to see why Sweden is so concerned.
A Russian petro-state has every reason to want to keep green power from being developed, and they stand to lose a lot of money and influence as sustainable generation projects come online in Europe and Scandinavia.
Subtlety has not been apparent in the Russian position, in addition to sending jets into both Finnish and Swedish airspace, the Russian Navy has been harassing marine construction of a undersea cable that would connect Latvia, Lithuania and Estonia to Sweden’s power gird.
As signatories of the Paris Accords these three former Soviet satellite need to get green power for their electrical grid. At the moment they are all connected to Russian electricity, and this is an impediment to their compliance with the emissions goals they have made.
The former Soviet states seem to be sincere in their desire to comply with their commitment to curb emissions. Lithuania’s Energy Minister Rokas Masiulis commented to Bloomberg that, “The fear of the Russian factor will be eliminated just as the fear of the Russian gas factor was eliminated with the start of the LNG terminal,”
Putin’s Russia is committing shameless acts of intimidation and they demonstrate just how willing petro-bully states are to use their military might to protect perceived economic interests.
The Economics of Change
It is a widely held and false belief that green energy is somehow economically uncompetitive .
While that was true a decade ago, today green power is actually cheaper then the archaic fossil fuels that are trying desperately to keep up with renewable power sources.
Internal combustion engines are still the cheapest way to go at a personal level if you want individual transportation. But in terms of public infrastructure, there is no way for traditional generation technology to keep up with wind and solar when it comes to cost.
Vattenfall was just awarded the contract to build the Kriegers Flak wind farm off the coast of Denmark with a bid of less than 5 euro cents per kWh. This is by far the lowest price that wind-based generation has ever been offered for, and shows how much the cost of renewable energy is changing.
In the United States where coal generation is far more common that the EU, a kWh of coal generated electricity costs between 7 and 14 American cents, so it is not hard to see why the old guard is so frightened by the next generation of renewable energy options.
Australia is practically made of coal, and in the land down under a coal generated kWh will run you about 8 Aussie cents on the low side, and that does not include the cost of carbon capture and storage.
If fossil fuels could genuinely compete with renewable sources, then there would be no need for Russia to intervene on behalf of its gas and electricity monopoly with its military.
President Putin is showing just how weak his economic position is, and unfortunately that position is likely to get worse.
Tyrannical Transnational Energy
We should never forget that energy is both an economic and strategic asset. The revenue that Russia would lose from Latvia, Lithuania and Estonia is nothing compared to the strategic advantage Moscow currently has to “switch off the lights”.
So what we are really talking about is economic control, and a nation’s ability to be politically independent. Russia and the United States both use economic tactics to political ends, and the advent of inexpensive renewable energy is changing the way the political equation is formed globally.
For the first time in human history we have economically viable sources of electricity that don’t require any sort of “fuel” source, in the way the term has been used up to this point.
The logistical chain that is required for every fossil fuel is also done away with when we transition to renewable generation, and this has major consequences when it comes to the current political balance.
The Kriegers Flak wind generation project will be able to power just over 20% of the houses in Denmark when completed, and this demonstrates the difference that renewables can make in the electricity needs of a country.
The downside to the existing energy providers is enormous. So it is no wonder that they are doing all they can to stem the construction of green generation, and stop the integration of international power grids.
A Green Future
Regardless of the current struggles with the aging monopoly providers, the future of renewable electrical generation is very hopeful.
Vadenfall was not always a green energy provider, they started off as a coal company and have recently committed to making wind generation the cheapest option in Europe.
It is just good business.
A Changing Energy Economy
Vadenfall’s sub 5 euro cent per kWh bid is not a rarity these days, Royal Dutch Shell won the contracts to develop the Borssele III and IV wind generations off the Dutch coast with a bid of just over 5 euro cents per kWh.
With their ample experience in off-shore oil drilling Shell is perfectly suited to develop wind generation in the sometimes trying North Atlantic.
This raises an interesting question: if Russia wants to maintain its position in Eurasian energy generation, why don’t they leverage the knowledge of state oil giant Rosneft?
Rosneft has experience building infrastructure in some of the most trying environments on the planet, and when they need a little bit of help the Russian Navy could fill in the gaps. If companies like Shell and Vadenfall can make the jump to profitable renewable electric generation, there is no reason why Russian industry couldn’t do the same.
Ultimately that is what will keep Russia relevant to the political economy of Europe and Scandinavia.
Whether Vladimir Putin will be the one to lead that integration of these synergies is yet to be seen. If he continues to embrace the “Trump” model of political and economic intimidation, it is highly unlikely that he will last another ten years at the top of the Russian political machine.
The next generations of human history have to be about cooperation and finding ways to work together if we are going to transition away from the industrial base that has brought us to this point.
Trying to maintain the status quo will only ensure that when it ends, we will be left empty handed.