Top Russian banker names major reason for European energy crisis

The head of Russia’s largest bank, Herman Gref, says the main cause of the energy crisis in Europe is faulty planning of the energy transition.

“We believe that the current energy crisis in Europe is not a renewable energy crisis, but an energy transition planning crisis and a gas crisis. Here I agree with the president of Russia, who pointed out the flaws in planning for the European energy transition,” Gref said in an interview with RIA Novosti.

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The CEO of SberBank and former head of Russia’s Economic Development Ministry agreed with earlier remarks made by Russian President Vladimir Putin, who said that European regulators were wrong to abandon the system of long-term gas contracts in favor of the spot-market.

“After all, previously more than 90% of European gas was purchased under long-term contracts, and this guaranteed them the stability of all conditions,” Gref pointed out.

Among other reasons behind the worsening crisis he named increasing post-pandemic global competition for energy, the decline in the production of renewable energy, as well as a record low level of gas reserves in European underground storage facilities.

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Gas prices in Europe have risen sharply in recent months, from about $515 per thousand cubic meters in August to nearly $2,000 in early October. The spike in gas prices has led to increases in the cost of electricity for residents and industries of the European Union, as well as subsequent industry failures and supply disruptions. Experts say that rising gas prices will force European countries to restrain, at least temporarily, their ambitions to phase out coal and fossil fuels in the push toward greener energy sources.

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