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02.02.21 “The global order isn’t keeping pace with real developments.” Interview with Dr. Kirsten Westphal, German Institute for International and Security Affairs • Reading time: 7 min.

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Dr. Kirsten Westphal

In the past, fossil energy’s role in international politics was decisive. Wars were fought over it. Yet trade in coal and gas also helped cement international partnerships and thus promote peace. As more countries embrace the energy transition and renewables, how will geopolitics change? Will the world become more peaceful or more fragmented? Dr. Kirsten Westphal oversees the Geopolitics of the Energy Transition project at the German Institute for International and Security Affairs. She talked to DEBATE.ENERGY about the energy transition’s winners and losers, the future of German-Russian relations, and the need for stronger international institutions.

Which countries will the energy transition affect the most?

The energy transition will have winners and losers. The losers will include the major exporters of oil, gas, and coal. The Gulf states and Russia, for example. Their sources of income will dwindle, and their reserves will lose value. The winners will be the major fossil-fuel importers, such as the EU and China. Germany will be among the winners. It will spend less to import oil and gas and is also a leader in the development of key technologies. But it needs to maintain this lead. Germany has disadvantages relative to China, whose much larger market enables it to achieve economies of scale. Germany can only achieve similar economies if it involves other EU countries. A lot will depend on policymaking. I believe it’s particularly important to keep an eye on the uncertainties of the transition phase. This is a massive systemic transformation and is already encountering structural disruptions.

Will there still be energy superpowers in 2050 or will influence be more evenly distributed?

Renewables’ advantage is that they’re viable almost anywhere in the world. Obviously, sunshine and wind speed vary by region. Still, renewables are much less geographically concentrated than fossil fuels. This will turn the energy system on its head: profits will no longer be generated primarily from the energy sources themselves, but rather at the conversion stage and in the deployment of technologies. The new energy superpowers will therefore be countries with good geographic and meteorological conditions and strong technology hubs. The United States and China are definitely among them. The EU can also play a key role in technologies and renewables generation in partnership with its neighbors like Britain, Norway, and countries along the Black Sea and Mediterranean. Examples include offshore wind and the production of low-carbon hydrogen and its derivatives. As for traditional energy superpowers like Russia and Saudi Arabia, it depends on how quickly they alter course and how well they cooperate.

Russia in particular is an important economic partner for Germany. How is this relationship likely to develop in the years ahead?

Germany’s challenge vis-à-vis Russia is to shape the long, gradual diminishment of its oil and gas imports – as well as for coal throughout Europe – with as little conflict as possible and in a way that achieves a balance of interests. This is all the more important because political relations between the two countries are already very strained. However, it would make sense to support Russia on its decarbonization journey. After all, Russia has what it takes to remain a major energy power. It has a huge wind resource in the North and a lot of sun in the South. Moreover, Russia already has the necessary infrastructure and strong engineering skills, which could enable it to play a leading role in areas such as the production of climate-neutral hydrogen. But this will require a political paradigm shift as well as political will on both sides to reset their energy relationship. In view of their difficult overall relationship, that won’t be easy. Germany and the EU are right to see Russia’s annexation of Crimea as the main reason for the strained relationship. But they shouldn’t disregard their debt toward Russia in terms of energy. If Germany and the EU want a reliable oil and gas supply during their transition to a low-carbon future, they need to do more than announce climate targets. They need to define realistic exit paths together with their suppliers.

Will the energy industry’s influence on international politics diminish in the future?

Not necessarily. Energy supplies may be used less for political leverage. Nevertheless, energy autonomy should not be Europe’s objective. Europe will still import a lot of energy, if only because it lacks the land to meet its demand for clean electricity and climate-neutral molecules by itself. Europe needs partnerships. Its neighboring regions, in particular, will become more important. As for hydrogen relations, it makes sense for Germany to think in concentric circles: first Germany, then the EU, then the EU’s neighbors, and so on. This is even more true for electricity grids. It’s interesting to see where Germany expands its grids and with which countries in interconnects, which in a way links the two countries’ energy futures. In short, the energy transition creates a lot of opportunities to influence other countries, and Germany needs to make use of these opportunities. It should focus on countries that have similar values and norms. The countries with which Germany already has relationships and infrastructure will be decisive as well, if only from a cost perspective. There’s also the question of where can the biggest climate-protection impact be achieved? Shaping the energy transition is therefore a highly complex task that must involve all levels: the global community, the EU, nation states, and especially regions. The governance of the energy transition is therefore a special challenge.

Are existing international institutions up to this task?

I don't think so. The main institutions all emerged from the end of WWII or the end of the Cold War. For example, the UN suborganizations for individual regions of the world are no longer fit for purpose. Take the United Nations Economic Commission for Europe and the United Nations Economic and Social Commission for Asia and the Pacific. Considering the strong infrastructure links between Europe and Asia, there should be a single UN economic commission for all of these regions. In general, the global order isn’t keeping pace with real developments. Networking and connectivity are accelerating, while China’s electricity and telecommunications networks are increasingly spanning the globe. The U.S. is China’s strategic rival. The EU needs to find its role. Politically it’s closer to the U.S., but Russia and China are virtually on its doorstep. Geopolitics will help shape the energy transition. In part, because the energy system will become more heterogeneous, fragmented, and regional.

Can the energy transition help promote peace?

The energy transition certainly gives the EU the opportunity to make Europe a stable and sustainable continent. Beyond that, the decisive factor will be the extent to which states cooperate multilaterally and focus on the common global good rather than their own short-term advantages. If they can manage that, then I’m confident that the world will be a better place. But we can’t expect it to happen automatically Just because there’s an energy transition doesn’t mean peace is going to break out everywhere.

Bio

Dr. Kirsten Westphal ist Leiterin des Projekts „Geopolitik der Energiewende“ bei der Stiftung Wissenschaft und Politik und zudem Mitglied des des Nationalen Wasserstoffrates

Dr. Kirsten Westphal

Dr. Kirsten Westphal is a Senior Associate in the Global Issues division of the German Institute for International and Security Affairs, which she oversees the Geopolitics of the Energy Transition project. She is a member of Germany’s National Hydrogen Council and the Scientific Advisory Board of the Real Instituto Elcano, Madrid. Previously, she was a member of the Expert Council of the Global Commission on the Geopolitics of Energy Transition (2018-2019). She has been Head of the German-Russian Energy Dialogue of the German-Polish Energy Dialogue projects since 2015 and 2016, respectively. Her research interests include the geopolitics of the energy transition, global energy issues, security of supply, and the EU’s external energy relations.

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