THE STATE OF THE EUROPEAN UNION. Reforming Europe in a time of war

THE STATE OF THE EUROPEAN UNION 38 the other hand, internal conflicts over the use of water, land, and energy sites are likely to increase. International energy relations are becoming much more heterogeneous. Compared to the fossil age, the energy world is becoming more regional. There are dan- gers inherent in this. Existing geo-economic rivalries and geopolitical fault lines around the world could intensify. This also applies to the West itself. We are currently experiencing a West that is largely united in terms of security policy. However, it is divided on energy policy. The US is energy rich by any measure. Europe, on the other hand, will continue to be dependent on imports, and then of electricity from renewable sources and of hydrogen. In addition to the US, China is also expect- ed to be among the winners of the energy transition. The People’s Republic is rich in the metals needed for this transition, the so-called rare earths. And with fore- sight, it has built up and secured massive processing capacities. If Europe wants to implement the energy transition quickly and relatively cost-effectively, it must engage with China and simultaneously reduce its vulnerable depend- ence.At the same time, the EU must be extremely careful not to become collateral damage to the growing tensions between China and the United States. The Europeans are in a difficult position, which has recently worsened dramatically because of the Russian war of aggression. The signs are increasingly pointing to competition – for added value, for raw materials, and for rare earths. Only by working together will Europe be able to keep up and assert its own interests. Without raw materials, the desired energy transition is not possible. Accordingly, the raw material policy re- mains a core geostrategic issue. The Europeans are in a poor position when it comes to raw materials. Existing deposits have often not been mined for reasons of cost; importing was simply cheaper (and also less of a burden on the environmental balance sheet). But imports also create dependency – and hence, vulnerability. Here, too, the war in Ukraine and the resulting sanctions are exac- erbating existing supply shortfalls. There are alternatives to Russia as a source, in Africa and Latin America for example. So the industry need not fear a standstill – but it does have reason to fear higher costs. In addition, Ukraine is one of the few countries outside China with significant deposits of rare earths. This is one of the reasons why the EU included the country in the Alliance for Batteries and Raw Materials last summer. The aim is to become less dependent on China. Therefore, the diversification and securing of raw material sources as well as the development of its own deposits will have to be pursued in Europe with absolute vigour in the coming years – for the sake of the climate and security. The power grid as the real network of power Another major construction project for Europe is in the electricity sector. Electricity is not only central to energy policy: its importance is also growing in foreign and se- curity policy.The energy transformation makes increasing electrification necessary. Worldwide, the share of elec- tricity in the energy mix will grow accordingly. In the EU, the demand for electricity could increase by 40 per cent by 2050. International networking must be intensified in order to transport electricity efficiently and over longer distances. In synchronous power grids, security and pros- perity are shared. The European power grid therefore ur- gently needs to be optimised, modernised, and expanded in order to meet this requirement. And the connection to the neighbouring regions must also be expanded. 2 Power grids are a question of geopolitical positioning. China has already understood this, as shown by the Belt and Road Initiative. The spatial dimension of the grid thus increasingly follows the logic of linking ideal locations for renewable energies efficiently and in an integrated manner with the load centres. Due to the growing volatile generation of 2  Available at: www.swp-berlin.org/en/publication/geopolitik-des- stroms-netz-raum-und-macht