Before the war, solar and wind sources were already cheaper than fossil fuels in 85% of the world; now they are cheaper almost everywhere.

Along with several world leaders, President Vladimir Putin chose not to attend the United Nations Climate Change Conference, otherwise known as COP27, currently underway in Egypt’s luxurious resort of Sharm el-Sheikh. The Kremlin issued a statement last month that Putin would not attend because he believed “no breakthroughs were expected”. While this may be true, all leaders of the 190 countries represented should nevertheless be grateful to the Russian President for helping their cause. Russia’s invasion of Ukraine has meant that global demand for fossil fuels, the main drivers of climate change, has very likely peaked—for good. The world’s policymakers have been working towards this tipping point for years. Now, the twin forces of national security and energy economics are driving a permanent system change away from fossil fuels quicker than ever, giving a glimmer of hope for the future of the planet.
Analysts are concluding that the Russian fossil fuel industry is currently facing a real crisis—yet another of Putin’s own goals resulting from his disastrous decision to invade Ukraine. Western sanctions and Russia’s own embargo on exports to the West mean that the industry is now facing long-term decline. When Gazprom switched off the natural gas Nordstream 1, citing maintenance concerns, the real reason was political, with Russia seeking to cause maximum inconvenience to Europe in response to sanctions. When its submarines blew up sections of the pipe, the message was clear. But whilst these actions will hurt Europe in the short term, they will also hurt big-time an important part of Russia’s economy. For example, in just a year, the flow of gas from Russia to Europe fell by more than 82%. In January 2021, supplies from Russia accounted for about 40% of the gas consumed in Europe, currently it is less than 10%. Oil can be carried by tankers to any part of the world, but gas needs to be liquefied for the same flexibility. Russia’s problem is that it has very limited facilities for liquefying natural gas, and already there are reports of “capping” of natural gas facilities, which means that natural gas is burnt at source because the industry cannot sell or store the gas coming from wells.
Russia’s oil industry is likely to prove more durable, as sanctions have so far had only a limited effect on reducing demand. Russia is exporting large quantities of oil to China and India at considerable discounts, and for as long as there remains a strong global demand, it’s likely that the Kremlin will find a way to continue exporting oil. The G7 countries have announced plans to cap the price of Russian oil by refusing to pay above a certain amount. The hope is that with the UK and EU also dominating the insurance of oil shipping, they are in a position to enforce this price cap, preventing rises for the West and limiting funds for Russia. The Kremlin has claimed that it won’t take part and won’t sell at a discount price, and if Russia can sell sufficient quantities to non-Western economies, such as India, the price cap may prove limited.
However, the simple fact is that those producers hoping for continued high gas prices, because of scarcity of supply, and high oil prices, resulting from OPEC+ market manipulations, are failing to realise that the world has changed from earlier energy price shocks. Today, alternative green energy solutions are large enough to supply demand growth and will do so at a lower cost.
Take a look at BP’s “Statistical review of World Energy” and you’ll find that in the decade to 2020, the global energy grew at 1% per year. In the same decade, solar and wind supply grew at an average rate of 20% per year, and made up about 4.4% of primary energy supply in 2021. A year of even 15% growth would see them make up 0.66 percentage points in total energy supply. In other words, under a steady-state environment, solar and wind are meeting about two-thirds of the growth in energy demand. Added output from hydro, nuclear and biomass supply is enough to make up the rest of demand growth. This leaves very little room for incremental demand for fossil fuels. According to BP’s report, fossil fuel demand reached a peak in 2019 and will remain on a plateau for a few years before falling off a cliff in the second half of this decade.
BP’s report was signed off by its chief executive in July 2021, more than six months before Putin invaded Ukraine, a war which has hastened the cliff edge. Consider a few calculations. If we assume for the sake of argument that efficiency increases by 1 percentage point and solar and wind growth increases by 5 percentage points to 20%, then the decline in fossil fuel demand would turn into a rout. Fossil fuel demand would fall by 25% this decade and then collapse in the 2030s.
It takes very few brain cells, a challenge for the Kremlin, to realise that Putin’s war is galvanising the transition in energy supplies. The twin converging dynamics of a surge in energy prices and Russian troops in Ukraine are forcing politicians to make choices once deemed impossible. In May, the EU published plans for a massive increase in solar and wind power in order to end its reliance on Russian oil and gas as fast as possible. The Commission proposed that 45% of the EU’s energy mix should come from renewables by 2030. “It’s clear that we need to end this dependence and a lot faster than foreseen before this war”, said Franz Zimmerman, the EU official in charge of the Green Deal. “Speeding up the transition means that money can stay in Europe, can help bring down the energy bills of European families, and will not be used to finance the barbaric war in Ukraine”, he continued. To help speed up renewable energy, the EU wants to make it easier for companies to build wind and solar farms by reducing the time for planning permission, “time that we do not have”, said Zimmerman.
Before the war, solar and wind sources were already cheaper than fossil fuels in 85% of the world; now they are cheaper almost everywhere. Low prices unleash the giant potential of renewables. Solar and wind energy is local and cheap—it is also clean. Solar and wind solve the energy trilemma: the struggle to balance decarbonisation, energy security, and affordability. The solution also releases countries from energy dependency.
Putin’s war in Ukraine will create massive fiscal problems for Russia in the near future because of the world’s accelerated move to green energy, resulting in less dependency on Russia’s export of fossil fuels. At the same time, green energy is solving many problems in the vital move to counter climate change, the purpose of the gathering in Sharm el-Sheikh. COP27 should be hugely grateful to Vladimir Putin.
John Dobson is a former British diplomat, who also worked in UK Prime Minister John Major’s office between 1995 and 1998. He is currently Visiting Fellow at the University of Plymouth.