- War and climate disaster are leading to more and more “energy shocks”
- A new study from Vienna University of Economics and Business (WU) explores the issues of energy shocks and policy targeted to boost sustainability and energy reliability
- The more renewable a country is, the less likely it is to suffer energy shocks, the research finds
At 8 a.m. on New Year’s Day this year, a 60-year chapter in Europe’s history closed down with a murmur not quite befitting its import.
The flow of Russian gas through Ukraine, once a vital artery of the continent’s energy supply, was shut off.
Unlike in 2009, when a similar disruption caused extreme panic and hardship across Central and Eastern Europe, the reaction this time in both political and economic arenas was markedly subdued. Prices edged upward, but markets held.
On the surface, this composure might seem like a triumph of resilience, of a combined European strength and self-sufficiency – despite the perhaps sharp energy hit – in the face of shutting down Russian aggression .
In truth, it masks a deeper unease, a subtle reckoning with a future in which energy security, climate policy, and geopolitical strategy are more entangled than ever before.
Europe has not escaped the trap of energy dependency. It has merely delayed the next shock.
Devising a roadmap for handling energy shocks
For decades, cheap energy has been the invisible scaffolding of modern economies, but today, it has become an arena of strategic vulnerability.
This is not simply about Russia cutting off gas. It’s a bigger problem: the fragility of systems built on fossil fuels. If we want a safer, more stable future, we must rebuild these systems with clean, renewable alternatives, putting a green Europe at the core of energy policy.
A new study from the Vienna University of Economics and Business (WU), led by Assistant Professor Anton Pichler offers a roadmap for governments on how to do this.
Pichler’s team conducted a deep dive into the Austrian economy to simulate the consequences of a sudden gas supply cut, a scenario that became all too real in late 2024 when Russia halted gas supplies to Austria in a dispute over payments. Austria represents a country particularly reliant on Russian gas, with about 80% of its pre-war gas supply imported from Russia, making it one of the most exposed countries to Russian using gas exports as a non-military weapon. Using advanced modelling, they quantified sector-specific disruptions, mapped policy responses, and, most critically, assessed which strategies could dampen the blow.
Their conclusion was clear: countries that invest early in renewables, energy efficiency, and smart infrastructure suffer far less in a crisis. Having greener solutions in place before an energy crisis results in greater stability.This proves that energy resilience is no longer one strategy for pre-empting and forstalling energy crises among many, but a sustainability, economic, and (geo)political imperative.
Their findings carry a message both sobering and hopeful. The severity of energy crises can be mitigated, even prevented, not only through better geopolitics, but through better energy systems, planning, and infrastructure.
We can see how this played out in the Europe’s recent energy shock, when, on 1 January 2025, after the expiration of the contract between Russian Gazprom and Ukrainian Naftohaz, the supply of Russian gas to the European Union via Ukraine was terminated. Europe’s quiet response to the Ukrainian pipeline closure wasn’t due to energy abundance; it was a matter of preparation. Nations had spent the past two years bracing for such a scenario.
Countries like Austria, Germany, Slovakia and others found new suppliers, stockpiled gas, and built new Liquefied Natural Gas (LNG) infrastructure.
Yet even this veneer of preparedness comes at a cost. Some places, like Slovakia, which once earned hundreds of millions annually from Russian gas transit, must now scramble for pricier alternatives. And coal, that dirtiest of fuels, is returning to fill the void in some corners of the continent because cleaner options aren’t ready yet.
Is renewable energy the solution?
The study draws parallels another powerful example – Japan’s post-Fukushima experience. After the nuclear accident, a nationwide campaign on energy conservation significantly reduced electricity use.
It wasn’t a technological revolution but a cultural one, proof that public engagement can be just as powerful as policy. It proved that when people and governments work together, they can make a difference both in the wake of crisis, and in preparation for the next one. ‘Through coordinated policy measures on the supply and demand side, adverse economic consequences of a drastic gas shock can be substantially reduced,’ the researchers write.
WU’s work echoes a shift in thinking that many European leaders are only beginning to grasp:energy shocks are no longer isolated events. They are structural stress tests that expose the unsustainable foundations of fossil-fuel-based economies.
That’s why Europe’s next move isn’t just about replacing Russian gas with American LNG. It is about rejecting the idea that energy policy and climate policy are separate domains.
A gas shock is not just an economic threat-it is a sustainability failure.
The long-term benefits of investing in sustainability
The researchers say Europe needs a two-part plan: deal with today’s problems while also building a better system for the future.
As a first step this means this means diversifying suppliers, managing storage, and encouraging fuel switching. Going forwards, it demands investment in building renovations, heat pump deployment, and industrial decarbonisation.
Whilst this would involve significant investment, doing nothing is not only just as expensive, it’s also setting the stage for further future failure. Slovakia’s €200 million annual loss is painful but survivable. A continent-wide return to fossil dependency in the face of future shocks would be catastrophic economically, environmentally, and morally.
And yet, there is something quietly elegiac about this moment in European energy history. The pipelines that once brought gas through Ukraine bore names like Soyuz (Union), Progress, and Bratstvo (Brotherhood), ghosts of a Soviet optimism that saw energy as a bridge, not a battleground.
Today, those same steel arteries are dormant, their names sounding like bitter irony.
“Progress” now means something entirely different: not more gas, but less; not deeper dependence, but meaningful transition.
Is the future renewable?
Could gas could start flowing through Ukraine again? Technically, yes.
But as the WU study makes clear, the real question is not whether we can resume old flows, but whether we should. The answer lies in what kind of future Europe wants to build.
Right now, Europe has a clear goal: full independence from Russian fossil fuels by 2027, as outlined in, the REPowerEU plan.
Even if timelines slip, the direction is firm. Investment in renewables is accelerating. New LNG terminals are online. And the economic rationale for a return to Gazprom grows weaker by the day.
WU’s research is a powerful reminder that the greatest threat to energy security is not instability, but inertia. And the greatest asset is not fossil fuel reserves, but foresight.
By, Thomas Willis
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