Friday, December 8, 2023

Seeing red, EU wants U-turn from Russian energy reliance

Bloc eyes new suppliers, renewables
Mrynske Production Department of Underground Gas Storage in Ukraine.

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Considering Russia’s invasion of Ukraine, the European Commission on March 8 proposed an outline of a plan to make Europe independent from Russian fossil fuels well before 2030. Plans include diversifying gas supplies via higher Liquefied Natural Gas (LNG) and pipeline imports from non-Russian suppliers, and larger volumes of biomethane and renewable hydrogen production and imports; and, reducing faster the use of fossil fuels in homes, buildings, industry, and power system, by boosting energy efficiency, increasing renewables and electrification, and addressing infrastructure bottlenecks.

The EU’s plans to accelerate cutting its dependency on Russian energy came the same day the United States and United Kingdom announced bans on Russian oil imports.

The Commission said it continues its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Russian gas monopoly Gazprom.

According to the Commission, REPowerEU also outlines a series of measures to respond to rising energy prices in Europe and to replenish gas stocks for next winter.

Europe has been facing increased energy prices for several months, but now uncertainty on supply is exacerbating the problem. Russia’s invasion of Ukraine has aggravated the security of supply situation and driven energy prices to unprecedented levels, EU Energy Commissioner Kadri Simson said. Europe has sufficient amounts of gas for the remaining weeks of this winter. But the Commissioner stressed that the bloc needs to replenish its reserves urgently for next year. “The Commission will therefore propose that by 1 October, gas storage in the EU has to be filled up to at least 90%. We have also outlined price regulation, state aid and tax measures to protect European households and businesses against the impact of the exceptionally high prices,” Simson said.

She reiterated that Ukraine is part of Europe and that should be also the case for their energy system. “We have committed to link their power grid to the European Continental Grid as soon as possible. This will help to keep the Ukrainian power system stable and the lights on. We are also working around the clock to ensure the necessary supplies of gas, coal, diesel, jet fuel, generators and other energy needs that Ukraine has right now. I want to thank Member States who are delivering urgent and necessary help. Because Ukraine’s security is also Europe’s security,” Simson said.

REPowerEU will seek to diversify gas supplies, speed up the roll-out of renewable gases and replace gas in heating and power generation, The Commission said, adding that this can reduce EU demand for Russian gas by two thirds before the end of the year.

“We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us,” EU Commission President Ursula von der Leyen said, calling for immediate actions to mitigate the impact of rising energy prices, diversify the EU’s gas supply for next winter and accelerate the clean energy transition. “The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system. I will be discussing the Commission’s ideas with European leaders at Versailles later this week, and then working to swiftly implement them with my team,” von der Leyen said.

EU Executive Vice-President for the European Green Deal Frans Timmermans said it is time for the EU to tackle its vulnerabilities and rapidly become more independent in its energy choices. “Let’s dash into renewable energy at lightning speed. Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here,” he said, adding, “(Russian President Vladimir) Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition”.

To address the skyrocketing energy prices, the Commission said it will look into all possible options for emergency measures to limit the contagion effect of gas prices in electricity prices, such as temporary price limits. It will also assess options to optimise the electricity market design taking into account the final report of the EU Agency for the Cooperation of Energy Regulators (ACER) and other contributions on benefits and drawbacks of alternative pricing mechanisms to keep electricity affordable, without disrupting supply and further investment in the green transition.

Full implementation of the Fit for 55 proposals would already reduce the EU’s annual fossil gas consumption by 30%, equivalent to 100 billion cubic metres (bcm), by 2030, the Commission said. “With the measures in the REPowerEU plan, we could gradually remove at least 155 bcm of fossil gas use, which is equivalent to the volume imported from Russia in 2021. Nearly two thirds of that reduction can be achieved within a year, ending the EU’s overdependence on a single supplier,” the Commission said, proposing to work with Member States to identify the most suitable projects to meet these objectives, building on the extensive work done already on national Recovery and Resilience Plans.

Reacting to the plan, WindEurope hailed the European Commission’s objective to completely end Russian fossil fuel imports before the end of the decade. “More than ever Europe now needs to tap into its massive wind energy resources. Speeding up the growth of wind is central to achieving energy security. And we need to do it with European technology. Europe must do everything to preserve our world-leading wind energy supply chain. Accelerate permitting,” WindEurope CEO Giles Dickson said, calling for smarter wind auctions that factor in wind energy’s contributions to a robust, resilient and circular economy and boosting research and development.

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Co-founder / Director of Energy & Climate Policy and Security at NE Global Media


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