High energy costs in Europe a result of Russia’s invasion of Ukraine

Since Russia’s invasion of Ukraine, and the subsequent restrictions on natural gas exports from Russia, Western Europe has been significantly impacted by volatile energy prices – a problem exacerbated by renewable energy investments that do not provide baseload electricity.

The result is that Europe is paying high electricity prices and seeing a wave of heavy industry leaving the region.

For example, the German economy is facing the longest reception since WW2, primarily due to high energy prices. And, in the UK, in January 2025, the country’s largest gas storage site warned only a week of natural gas supply remained after wind capacity across the continent fell in winter weather as the country came within a whisker of power blackouts.

There are a lot of dynamics behind the decline of Europe but, to put quite starkly: the countries that are benefiting from the de-industrialization of Europe (the US, China, India) as industry looks for a new home, need more energy to meet the new demand — and see the decline of the European economy due to its vulnerability to high energy costs as a warning.