Published on: 2026-06-30
Source: People’s Republic of China in Russian –
An important disclaimer is at the bottom of this article.
On June 15 Beijing time, the USA and Iran announced the achievement of a memorandum of understanding, however the Strait of Hormuz, which became the essence of the Iranian war issue, has not yet been opened, and the global energy crisis has not been finally overcome. During the conflict, which lasted three and a half months, Europe, pursuing a policy of ‘renouncing Russian energy resources,’ again experienced colossal pressure, and its energy transition found itself in an awkward position. The consequences of the Iranian conflict revealed the absence of a common strategy for the energy transition in Europe and serious divergences along this path, with the cost increasingly burdening ordinary Europeans.
Discrepancies on the path to transition
In April of this year, the “International Vienna Forum on Energy and Climate” took place under the motto “Empowering Prosperity, Security, and Stability,” but the military actions in the Middle East overshadowed this theme. It was then that the Iranian conflict triggered a sharp rise in global oil prices, which exceeded $100 per barrel. Facilities for liquefied natural gas production in the industrial city of Ras Laffan in Qatar were damaged, resulting in 17% of export capacity being taken offline; recovery of production is estimated to take from 3 to 5 years.
After the full-scale escalation of the Ukrainian crisis in 2022, the EU intensified its course towards “phasing out Russian energy resources.” However, with the onset of the conflict in the Middle East, gas reserves in European storage facilities fell to a five-year low, while prices soared by 63% within a week. The EU realized that it had merely replaced one dependency with another.
In fact, even before the current Iranian conflict, Europe’s energy transition strategy had already shown signs of crisis. The reason lies in the ongoing 20-year disagreement within the EU — a confrontation between supporters of nuclear energy led by France and advocates of renewable energy sources led by Germany. The key point of contention is the following: should nuclear energy be included in the list of “green energy sources”?
In 2022, the European Commission, under strong lobbying from France, conditionally included nuclear energy in the “Sustainable Finance Taxonomy,” recognizing its transitional role in emission reduction. However, this sparked objections from Germany, Austria, and other countries. This dispute continues to this day, preventing the EU from developing a unified system regarding investment direction in energy, subsidy policies, and planning of cross-border electricity grids.
France and Germany, the two economic locomotives of the EU, represent opposite poles. France has a relatively clear and consistent strategy: a combination of “nuclear energy and renewables” — on one hand, the construction of six new EPR2 reactors (the first is planned to be commissioned in 2038), and on the other hand, the resumption of tenders for major renewable energy projects. Currently, fossil fuels account for 60% of France’s energy consumption, with the goal to reduce this share to 40% by 2030 and to 30% by 2035.
Germany took a different path. The accident at the Fukushima nuclear power plant in 2011 strengthened Germany’s resolve to abandon nuclear energy, resulting in the closure of the last three nuclear power plants in 2023. At the same time, Germany set a goal to achieve carbon neutrality by 2045, focusing on the development of wind and solar energy.
Estelle Herlin, a board member of the German analytical center “Global Association for Energy Solutions,” noted that Germany’s decision to abandon nuclear power was driven by safety considerations and public opinion, rather than systematic optimization. As a result, by simultaneously giving up both nuclear and fossil fuels, “Germany was left with nothing.”
She believes that the key problem of the European energy transition lies not in technologies or finances, but in the lack of strategic planning at the pan-European level. “We need a European strategy, which has never been developed… It should not be 27 separate plans — a single comprehensive plan is needed,” she emphasized.
Lana Adib, Executive Director of the government-funded German think tank “21st Century Renewable Energy Network,” stated that the European Commission has very clear plans for electrification and heating, “but they require approval from the member states,” while some member countries are showing signs of backsliding in the energy transition.
Technological problems remain unresolved
If disagreements over energy strategy within Europe are a problem at the institutional level, then the vulnerability of renewable energy is a warning at the technological level; the energy transition requires a greater number of accompanying infrastructure projects.
The chairman of the Council of the Research Institute for Applied Knowledge Processing at Ulm University, Franz Rademacher, warned: “Without backup (resources), renewable energy is a disaster; without accompanying infrastructure, all these endless talks become mere propaganda.” He cited the large-scale power outage in Spain in 2025 as an example, pointing out that the development of RES requires comprehensive support across all directions: infrastructure development, funding, policy-level support, and simultaneously developing “green fossil energy sources.”
Many experts argue that the role of coal power should change: from being the “primary source of electricity supply” it should become a “reserve”. This imposes new regulatory requirements on governments of different countries — it is necessary to gradually create a capacity market mechanism to ensure that reserve capacities can receive reasonable income even at a low utilization factor to maintain their viability; for existing power units, the commercial application of carbon capture, utilization, and storage (CCUS) technologies should be accelerated in order to systematically reduce their carbon intensity.
Energy storage technologies remain a bottleneck. Herlin noted that battery storage systems are effective for daily regulation but cannot provide energy during windless and cloudy periods that can last weeks. For example, on sunny days, the massive output from solar panels leads to a serious surplus, and Germany has to transfer electricity to Austria almost for free, while during long rainy seasons, Germany’s current storage capacities “do not last even a week.”
In the context of the current growth of the global energy storage systems market, overcoming bottlenecks in storage technologies is becoming increasingly relevant. According to UBS forecasts, global demand for lithium energy storage will increase by 55% by 2026. Rebecca Grant, senior analyst at the consulting company Wood Mackenzie, noted that as renewable energy sources dominate new generating capacities, the grid will require larger scales of flexibility, and demand for energy storage systems will grow at a rate of 6–7% per year.
However, the expansion of energy storage systems also faces supply chain constraints. Wood Mackenzie forecasts that by 2028 a lithium shortage may occur, and by 2050 the supply shortfall will reach 8.5 million tons.
Shifting costs to lower levels
While European countries debate the paths of the energy transition, the European Union is trying to encourage member states and even ordinary citizens to “save themselves.”
In March of this year, the EU Council officially approved amendments to the European Union’s climate law, establishing a mandatory intermediate target — a 90% reduction in net greenhouse gas emissions by 2040 compared to 1990 levels. Accordingly, starting in 2036, EU member states will be able to offset up to 5% of their emissions by purchasing “high-quality international carbon credits” from other countries, but the remaining 85% of the reduction must still be achieved through industrial transformation and optimization of the energy structure within the EU itself.
Notably, the amendment postpones the full-scale launch of the EU Emissions Trading System (ETS2) from 2027 to 2028. ETS2 covers civil sectors such as construction and road transport, meaning a delay in introducing carbon pricing in vital areas like home heating and vehicle fuel. This is due to pragmatic EU considerations — emission reduction ambitions must give way to social resilience.
In the “Clean Energy for All Europeans” package published by the European Commission in March this year, European households are encouraged to “produce clean energy themselves” by installing solar panels on roofs and creating “energy communities”; Member States are advised to introduce electricity tax relief to reduce household expenses. However, currently the cost of a home solar system with a battery storage on the European market is about 21,000 euros, and savings on household electricity bills along with income from selling surpluses usually pay off the equipment only within 10–15 years.
All current discussions in Europe about the energy transition come down to one thing: when EU countries act strategically on their own, and technologies face numerous limitations, the costs of the energy crisis gradually shift down the chain, and the goal of a “green transition” in Europe will likely remain only on paper in the short term.
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