Changing European Energy Policy : The Challenge of the Energy Price Storm

Abstract

This paper examines the roots of the European energy crisis within the period of 2021–2022, the reasons for the European gas shortage, the effect of the Russian invasion of Ukraine, and the potential EU responses. The current crisis is a result of several factors, starting from the Covid-19 pandemic in 2020 and amplified severely by the current conflict between Russia and Ukraine. In addition, five reasons were identified as worsening the EU energy situation. These include market-based gas prices, external dependency, global imbalances, the EU's climate policies, and low European energy stocks. The Russian invasion of Ukraine put pressure on the oil and gas supplies to the EU. This situation led the EU to introduce sanctions and measures that target increasing the share of renewable energy while reducing the dependence on Russian gas. Finally, we shed light on the energy transition as an opportunity to deal with climate change and limited energy resources while also showing the challenges that would hinder a just transition.

Price and Income Elasticities of Hungarian Household Energy Demand: Implications for Energy Policy in the Context of the Energy Crisis

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