00:00This week a Ukraine special from Europe to Asia and the US. How was the Russian invasion of Ukraine affecting the green transition. They want the freedom to be able to move to cleaner energy and they're going to. So I think it could wind up actually accelerating the transition with surging energy prices and sanctions on hydrocarbons. Is it time to reconsider nuclear power. Best time to have done this would have been 20 years ago. The next best time is starting today and rethinking our priorities. How one Ukrainian American billionaire is tackling the energy crisis from the demand side. It's like injecting heroin you know for the short term pain cure. I mean this this is really not helpful in the long run. From Bloomberg's global headquarters in New York I'm greatly lines. And this is Bloomberg Green. The energy transition has become a weapon. That's one consequence of the Russian invasion of Ukraine. What had until recently been Europe's decades long pursuit of a green agenda to replace coal and natural gas with wind turbines and batteries has become a matter of wartime urgency. Leaders in Brussels Berlin Paris and Warsaw woke up to a new reality in which spending up to one billion dollars per day on Russian fossil fuels meant financing the missiles exploding and Keith. So with each round of sanctions and investment the transition accelerates. But it won't happen overnight. While battles rage in Kharkiv care Sonia Mariupol the rest of the world is faced with a moral hazard that few can afford. And Europe and America energy costs are driving inflation that hasn't been seen in decades. While blackouts and broken supply chains are destabilising governments from Sri Lanka to South America. Meanwhile the oil exporting nations once pariahs to the climate minded West are suddenly the belles of the ball especially ahead of cop hosted in the heart of the Middle East. We spoke to special presidential envoy for Climate John Kerry who was confident the war would expedite the green transition. There's been a massive step up in the commitment of countries in Europe. Germany is an example of major now deployment of renewables way beyond what they thought they were going to do and the current schedule. And they are about to take major steps to decouple their gas and oil dependency. With respect to Russia. So things are in flux right now. Is there a momentary hold really on the progress we're making. Answer is yes. I think it's unfortunate. But in the long run I think most countries have come to understand they don't want their source of energy to be weaponized by another country as Putin is doing. They want the freedom to be able to move to cleaner energy and they're going to. So I think it could wind up actually accelerating the transition. That was John Kerry there. Now let's get to our reporters around the world to break down how the war is impacting their regions. In Brussels we have John Asia. Oakeshott Ratty is in London. Jennifer Tillawi is in Washington D.C. And we also have Simone Foxman joining us in Doha. So thank you all. John let's just begin with you. Clearly Europe is very dependent on Russian fossil fuels. About a quarter of its oil 40 percent of its natural gas come from there. So how has the war impacted markets in Europe and what has the response been on the continent. Well as you rightly pointed out the EU is probably one of the most affected by the current crisis 40 percent as you said of its imports of gas come from Russia. It's big eastern neighbour. So the continent has been very hard hit. I mean even before the conflict prices were rising amid a bounce back economic bounce back from the Covid crisis. And then the war has just sort of turbocharged that as investors as energy traders have prepared for potentially a gas cutoff. We've already seen that in the likes of Poland and Bulgaria and all that makes it quite difficult for the EU to act. Remember its 27 member states. They need to find agreement. But even so it has acted fairly quickly. I think by most accounts most people would say that is come forward with a plan to cut Russian gas by two thirds this year. And that's a lot. The key question is how is it going to do that. Well a lot of it will come from alternative suppliers liquid not liquefied natural gas. Other supplies like Algeria as a bijan. All those are options. But also it really wants to speed up the rollout of renewables. Well in Oxford over to you. The U.K. isn't quite as dependent on Russia as its peers are in Europe. So in some ways that has enabled it to take an even stronger stance here. What is it done to mitigate the impact. Indeed it went with a ban on Russian oil as early as March and then also put a ban on Russian coal. Later in April all of these bans are going to be phasing out Russian imports by the end of the year. So it's not a sudden shock to the system. It hasn't done very much on Russian gas but only 4 percent of its imported gas comes from Russia is the stance that the government has taken. Now unlike the EU however the UK hasn't really done anything to accelerate the roll out of renewables or even try and address energy efficiency which would reduce the use of energy in general and does imported energy from Russia which would come from either insulating homes or telling people to use less energy. Now whether the UK does and take those steps remains to be seen. There is currently a cost of living crisis in the UK because of the cost of energy. And so the politics of anything it can do in the short term are really difficult. And Jennifer let's bring it to the US now because obviously the U.S. is a little bit more insulated from the war that is going on on the European continent. Yet you've still seen the impacts of the war reflected in higher gas prices at the pump and higher energy bills. And that's created quite a puzzle for the Biden administration. Absolutely. I mean there's no question that the overall increase in fuel demand combined with global efforts to wean off Russian supplies have had an impact here in the U.S. which moves to ban Russian oil imports itself in March. Gasoline prices here are now at an all time high. Not counting for inflation. And you know it's not just an economic problem for President Biden. These high gasoline prices and record inflation pose an acute political threat. They exacerbate the risk that his Democratic Party won't keep control of Congress in the elections this November and they make it harder to achieve his broader climate agenda. So what's really interesting is we've seen Biden forced into a posture of begging U.S. oil companies to produce more crude. He's taken the unprecedented step of releasing one hundred eighty million barrels of oil from the nation's emergency stockpile. He's also seeking to bolster liquefied natural gas flows to allies in Europe in an effort to supplant Russian supplies. The administration insists the short term moves to address an acute economic problem in the U.S. and deal with gasoline prices won't derail their long term renewable energy and climate goals. The U.S. government is still moving forward with plans to accelerate electric vehicles and cap methane leaks at oil wells. But it is just a remarkable shift for a president who campaigned on promises to combat climate change accelerate renewable fuels and block drilling permits on federal land. Yeah President Biden now a wartime president versus the climate president that he wanted to be finally surmount. Over to you in the Middle East obviously all of this is happening in the run up to COP 27 in Egypt. What could Middle Eastern countries actually stand to gain from this conflict. Well we certainly expect them to have a lot more clout in Egypt than they did in Scotland. Lending credence to that idea is the fact that we've seen a flood of European leaders that come through this region the likes of the U.K. Boris Johnson use Joseph Burrell Robert IBEX of Germany all asking for more oil and gas for the most part. They've frankly been disappointed OPEC hasn't dramatically increased production as they might wish. And in Qatar which has tried to help a little bit more the country has pretty much said we are maxed out on the kind of production of LNG that we can give you. And therefore we are very limited in our ability to help. Also all of this lends credence to the argument that Qatar has made that a natural gas is transition fuel for the future. This is actually plastered on a billboard in downtown Doha. So natural gas may be seen as more of a solution given its importance right now given that it's cleaner than coal and oil to burn. We also expect that's kind of an idea that energy producers across the region are going to adopt when they go to Egypt for COP 27 this year and in the future they want to be part of the solution. They don't just want to be considered part of the problem Kelly. All right Salman thank you. Thanks really to our reporters across the globe Simone Foxman of course in Doha. Jennifer Louis in Washington Bookshop Ratty in London. And John Ager in Brussels. Thank you all. Coming up what are the longer term impacts of the conflict in Ukraine. German carmaker Volkswagen may turn back to coal powered manufacturing but could it return to nuclear power solve some of Europe's problems. This is Bloomberg Green. From Bloomberg's global headquarters in New York I'm keep their lines and this is Bloomberg Green. In the wake of the invasion of Ukraine Europe has announced plans to phase out oil from Russia. It will ban Russian crude over the next six months and refined fuels by the end of the year. But both people and companies in an already energy stressed continent are being forced to take unusual measures. German carmaker VW owns and operates a 140 megawatt power plant in Wolfsburg. It was due to convert to natural gas this year but that future is now in doubt. Our reporter Christopher Oswald investigated. The war in Ukraine is what I'm most concerned. Hello from BOVESPA in Germany. We are about one hour drive outside of Berlin the German capital. And what you see behind me here is the world's biggest car factory. You can produce as many as 800000 cars at the moment. It's a bit less than that. And in order to be able to produce that many cars here from Germany you need a lot of energy. What you also see behind me is the is an owned power plant that basically provides the electricity to operate the manufacturing facilities. And the bond is so important that it also supplies energy for the heating of the homes involved spoke the city that has been built around this factory. Now the war in Ukraine has led to concerns that the supply of Russian energy imports could be cut off immediately. Russia has done so with Poland with Bulgaria. And there is great concern that Germany could be next if Russian energy supplies would be cut off. That will pose an enormous risk for the entire German industry and for folks. Bargain here involves book as well. The war in Ukraine is what I'm most concerned because of its long term effects. Now it will depend on how long is it carrying on. And it has a severe effect on raw material prices in the cheap costs. And it may impact Europe and especially Germany's business models quite severely. If we are not able to stop that folks like this drop that plan and it's already started to shift the power plant from coal to gas. The goal was to reduce CO2 emissions by about 60 percent. But that plan has to be reviewed at the moment because it's unclear how stable the supplies will be going forward. So instead of shifting all the way to gas by this fall the goal is now to be able to operate the plant focused on coal and on gas depending on what energy source will be available. First off Raul while there involves. Now another controversial subject in Germany is its intransigence when it comes to nuclear power. The green transition is in constant search for baseload power which can pick up the slack from less reliable renewable sources. According to its proponents nuclear. Could both serve that role and relieve some of the pressure caused by the energy crisis. I spoke earlier to Mark Nelson managing director at Radiant Energy Group about what role it could play. That's the problem with nuclear power. It does take a while. I think it's probably the slowest and most expensive way to make really cheap electricity as opposed to say wind and solar which are very fast and often cheap ways to make expensive electricity. So it's a matter of investing now for a really good situation later. Fortunately the nuclear fleet in France is severely underused. That can be fixed with better management of the French system. They could get 20 maybe even 30 percent more electricity out of the exact same reactors with better interconnections between France and other countries. That means France can bear the lion's share of the burden of decarbonising a lot of Europe off of Russian fossil fuels in the next few years. And then countries like Germany certainly could just order fuel and in a few months they'll have the fuel they need to keep operating millions of people's worth of electricity. That could take around 20 25 percent of the Russian gas they're using today off of their system. So it's it's an it's probably the biggest single thing that can help at this point. Well Mark what you're saying speaks to kind of the divergence from a policy standpoint. We've seen within different European countries France that has been more open to nuclear power and Germany which has shifted sharply away from it. How much of a mistake is that looking like in hindsight. Well a mistake implies that it wasn't intentional by German leaders to get onto Russian fossil fuels and off of their own nuclear power. It's looking really terrible not just on the cost. I mean the replacement power is about 10 times as expensive as the ongoing cost of their relatively young nuclear plants. So just economically it's it's bizarre and self-defeating. But in terms of policy it's been it's been devastating. Relatively early on in the war in Ukraine Russia took control of a nuclear power plant and that raised some serious alarm bells. What are your ideas around that kind of risk. Well we knew that nuclear plants were built tough. But I don't think any of us dreamed we would find out that you could have a tank battle for a nuclear plant in a parking lot and a nuclear plant could just operate straight through without missing a beat. I wish we hadn't learned it. Now we have. So that'll go. And all the safety books what to do during a war. And I don't know. I don't know if we would have done the same thing and kept the plans on the whole way but we wouldn't want to do that to an oil refinery. Let me let me tell you that. So is it actually some kind of perverse lesson where you learn that nuclear is indeed safer even in wartime. Yeah I think so. I mean we knew that nuclear plants are designed to be hit with aircraft for example and. Right Drew. But I think that we didn't know if the professionalism typically seen a nuclear plant would extend to the staff operating and keeping the plants safe through combat. But I guess we've learned that that perverse lesson and Ukraine remains almost completely reliant on their nuclear fleet to keep the lights on during the war. How do you see nuclear fitting in more broadly to the green transition. You say that it's slow it's expensive it takes a while to ramp up. So how large of a role can it really play. Well once you have it it's the cheapest and best. So for example Finland had a had a terrible time building a nuclear plant from 2004 to now 18 years. That's not acceptable. The day it came into service imports of power sharply dropped in Finland prices sharply job carbon emissions sharply drop. And that plant's going to last for 100 years. So you see it's a little bit of a paradox. It's expensive to start. It's hard to decide on when you do and you build it. There's nothing like it. Best time to have done this would have been 20 years ago. The next best time is starting today. All right. On that note we will leave it. Thank you so much to Mark Nelson managing director at Radiant Energy Group. Coming up supply and demand rather than tackling the energy crisis by ramping up production. Is there another way to bring down prices and speed up the transition. More next. This is Bloomberg Daybreak. From Bloomberg's global headquarters in New York I'm Kimberly Lines and this is Bloomberg. Green energy markets are caught in a vise. A surge in demand as the world emerges from the Covid pandemic is being compounded by supply issues caused by the Russian invasion of Ukraine. As we've seen that's pushing some nations into burning more fossil fuels. But Ukrainian American billionaire and CEO of inventor G. Michael Polsky has an idea for how to balance out the equation. He joins me now. I'm not sure any of us could have predicted with certainty the war in Ukraine and how it has played out over the last several months. Ukraine of course the country that you were born in. I'm wondering how you view the war and its impact on the transition. Do you think it has stopped it from accelerating to the same degree. It would have in some sense as you see the likes of the Biden administration pivoting back to fossil fuels as Europe is firing up its coal plants once again or do you think in some ways it has actually intensified the need for renewable power. It's an interesting question we have to look at both ways certainly in the extremely short term where a war in Ukraine clearly disrupted our planet in the long term. I do believe that you know renewable energy or pivot towards renewable energy will even more accelerate because at the end of the day always looking to waits in energy there is a supply side and there is a demand side on the supply side. We have very limited control here. Like I said we need to temper early can increase production but with a small amount we can not replace all the Russian oil and potentially some other oil from unstable countries. But where we really have a much better control of our demand side. So by deploying more renewable energy we can reduce our reliance on fossil fuel. By definition as more renewables comes in the less we have to burn natural gas or coal to to produce electricity. Well and if we could just dig into that a little bit more in the supply and demand dynamics that you were just talking about clearly so much focus has been put on the supply side on just securing these energy sources. There's been less conversation about reducing demand about consuming less energy in response to this kind of crisis. How should the U.S. and other countries and businesses go about doing that about approaching this crisis from the demand side. I really believe that this whole supply demand issue is is very critical and very important because in the long run we still we still need to go toward renewable because no dependency on on fossil fuels. That's something that we have to reduce. And without that we will be as we will be subject to if not Russian but another type of destruction from someplace else. And we'll be talking about this again and again and again. And unfortunately another thing is energy is very politicized. So it's it's almost become a political issue and we have to understand it. And then we have to really try to make it less political so we can make a right and rational decisions here. Clearly now we can see what what the energy what kind of strong weapon it can be. If we do not do this we may have the similar conversation as having to do five years from now 10 years from now. And that's what happened historically. We talk about this but we haven't we haven't done much. What's really changed now in my opinion is now we have technologies. Now you know we have you know technologies solar wind and the right cost to really displace fossil fuel in a massive scale. Yeah I mean just talking of different times in history it strikes me that when you came to the US in 1976 that was the days of the oil embargo and all the repercussions of that. Obviously we live in a very different world now especially with the technologies as you describe. Now that these technologies are present and and with the war and the potential long term ramifications of that in mind what is the future energy mix going to look like going forward and does the war change that at all. In my opinion that energy mix of the future will well look like you know considerable amount of renewables. And I think we can again Tom Keene as an engineer at DAX. We can easily go to 70 80 percent of renewable energy. You know maybe remaining now we'll have some nuclear obviously too. And remaining we may still use the fossil fuel to back up our agreed. So we will we will we will have enough backup sources to provide a reliable supply of power. Finally just aside from the energy conversation around the war just from a humanitarian standpoint I'm wondering if there's anything you're doing now in this time to help your fellow Ukrainians. Yeah by myself my family would definitely play an active role here for a while. Obviously we are here in the United States that we provide financial resources to support various organizations to support children's to support Ukrainian various other humanitarian causes. So we really play an active role. Ukraine need a lot of help right now and we played our role in this. And really my heart is with people of Ukraine. Votes a tremendous suffering here at this time. And I'm looking forward for Ukrainian victory. My conversation there with the CEO of inventor Jean Michael Polsky. So from short term disruptions to long term re evaluations the invasion of Ukraine has forced the world to change its relationship with energy. And while the war is a tragedy it may also be remembered as a catalyst for the green transition. That's it for this week's edition of Bloomberg Green. But keep the conversation going. You can follow us on YouTube Instagram and Twitter at climate. From Bloomberg's global headquarters in New York. I'm Katy Lines and this is Green.

No schedule data available.

Bloomberg Green: How the Ukraine War Is Impacting Climate Change

Russia's invasion of Ukraine has caused the world to rethink its relationship with energy. Oil embargoes and cancelled pipelines have sent prices surging from Europe to Asia and South America. But while the short term impacts are clear, will it actually speed up the transition to renewables in the long term? In this edition of Bloomberg Green, we go from Europe to America to the Middle East to discuss how the invasion of Ukraine is impacting politics and global energy markets. We speak with Ukrainian-American billionaire Michael Polsky about his route to running a renewables giant, how it is faring in the midst of war, and what he is doing for his fellow Ukrainians. Plus, Radiant Energy Group's Mark Nelson tells us why nuclear power is both a safer and surer source of energy when it comes to a conflict zone. (Source: Bloomberg)