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EU unveils RepowerEU to shift away from Russian energy dependence

The European Commission has presented the REPowerEU Plan, in response to the global energy market disruption caused by Russia’s invasion of Ukraine.

A Flash Eurobarometer survey in all EU Member States showed a large consensus among EU citizens: 85 per cent of Europeans believe that the EU should reduce its dependency on Russian gas and oil as soon as possible to support Ukraine.
At the same time, the EU must also tackle the climate crisis.

The measures in the REPowerEU Plan can respond to both these ambitions, through energy savings, diversification of energy supplies and accelerated roll-out of renewable energy to replace fossil fuels in homes, industry and power generation.

“We have already embarked on a transformation of our energy system to become climate neutral – our famous European Green Deal. And this was already ambitious,” said the president of the Commission, Ursula von der Leyen. “But today, we are taking our ambition to yet another level to make sure that we become independent from Russian fossil fuels as quickly as possible. This is REPowerEU. REPowerEU will help us to save more energy, accelerate the phasing out of fossil fuels and kick-start investments on a new scale. This will be speed-charging for our European Green Deal.”

Short-term behavioural changes that can cut gas and oil demand

According to the Commission, energy savings are the quickest and cheapest way to address the current energy crisis and short-term behavioural changes could cut gas and oil demand by 5 per cent. Moreover, using less energy supports the security of supply, facilitates storage requirements and underpins the clean energy transition.

In the shorter term, opportunities to reduce energy consumption would come from voluntary choices, some of which could also last into the mid-to-long term if they lead to changes in habits.

These choices should primarily focus on where the greatest savings in gas and oil consumption can be achieved. First of all in heating, where natural gas plays the largest role, accounting for around 42 per cent of energy used in the residential and household sectors. Another key sector is transport and mobility, with some additional short-term potential in industry sectors.

Information and awareness are key in this regard. Other than the already announced joint campaign of the Commission and the International Energy Agency (IEA) Playing my part, the Commission is launching the consumer interface of the European Product Registration for Energy Labelling (EPREL) database 4, to support consumers in choosing more efficient appliances.

The IEA estimates that these types of short-term gas-related measures could achieve a 5 per cent reduction in (final) gas use (around 13 billion cubic metres, bcm) over a year. Similarly and depending on the Member State and its overall transport demand, measures could achieve up to a 5 per cent reduction in (final) oil use (around 16 million tonnes of oil equivalent, mtoe), while not preventing necessary journeys.

Short-term choices can also reduce bills. Indeed, high energy prices were felt especially in Central and Eastern European countries. Addressing a conference of young European leaders, Croatia’s Prime Minister Andrej Plenković said that the problem with the current energy crisis caused by the Russian aggression is that it is not known how long it will last and instruments of control of energy product prices are weak.

The goal is also to enhance long-term energy efficiency measures, including an increase from 9 per cent to 13 per cent of the binding Energy Efficiency Target under the Fit for 55 package of European Green Deal legislation.

Member States can also introduce obligations to ensure that in key sectors, energy efficiency will be increased, subsidies for fossil fuel technologies will be stopped, renewable energy technologies are consistently promoted and energy-saving technologies and equipment are quickly developed. Or they could introduce additional Minimum Energy Performance Standards for buildings to boost renovations that encompass also heating (and cooling) systems. States are also encouraged to use fiscal measures to encourage energy savings, such as reduced VAT rates on energy-efficient heating systems, building insulation and appliances and products.

Diversification of supply

Regarding the diversification of supplies, over the past months, the EU has secured record levels of LNG imports and higher pipeline gas deliveries. The newly created EU Energy Platform, supported by regional task forces, will enable voluntary common purchases of gas, LNG and hydrogen by pooling demand, optimising infrastructure use and coordinating outreach to suppliers.

“We will continue our efforts to build up the liquefied natural gas (LNG) capacity in order to strengthen the country’s security of supply and to phase out the use of Russian gas,” said Estonia’s Minister of Economic Affairs and Infrastructure Taavi Aas, referring to the LNG terminal project jointly developed with Finland.

As a next step, the Commission will consider the development of a joint purchasing mechanism which will negotiate and contract gas purchases on behalf of participating Member States.

REPowerEU
Source: Bulgaria’s Energy Ministry.

The EU External Energy Strategy adopted today will facilitate energy diversification and build long-term partnerships with suppliers, including cooperation on hydrogen or other green technologies. In fact, commenting on the consequences of the war in Ukraine on Europe’s energy systems, Bulgaria’s Minister of Energy Alexander Nikolov reminded of the importance of innovation and technological advancement to address the current energy crisis, always keeping in mind the different starting points of the countries.

“Advances in technology provide such an opportunity,” he said. “Thus, the approach to decarbonisation will be different in the future, not the closure of facilities [that can continue to operate with much lower carbon emissions, but technological renewal.”

Sergiy Makogon, the CEO of the Gas Transmission System Operator of Ukraine (GTSOUA) is convinced that Europe can completely eliminate its dependence on Russian energy by 2024.

“Recent steps taken by several countries confirm this,” he said. “The interconnector GIPL between Poland and Lithuania has already been launched, connecting the Baltic countries with the European gas markets. […] Lithuania has refused to import Russian gas since the beginning of April and the country’s gas needs are being met by imports through the LNG terminal in Klaipeda. Finally, Bulgaria has made arrangements on supply of liquefied natural gas from the United States since June after Russia’s Gazprom cut off gas supplies.”

The role of solar in reducing dependence on Russian fossil fuels

Finally, the REPowerEU plan envisages a massive scaling-up and speeding-up of renewable energy in power generation, industry, buildings and transport. The Commission’s proposal is to increase the headline 2030 target for renewables from 40 per cent to 45 per cent under the Fit for 55 package.

In particular, there will be a dedicated EU Solar Strategy to double solar photovoltaic capacity by 2025 and install 600GW by 2030. These frontloaded additional capacities displace the consumption of 9 bcm of natural gas annually by 2027. Massive deployment of solar energy is also a chance to reinforce the EU’s industrial leadership. By creating the right framework conditions, the EU can expand its manufacturing base, building on its vibrant competitive and innovation-driven environment while ensuring that solar products are up to the EU consumer’s high standards.

Although not a Member of the European Union yet, Serbia’s Deputy Prime Minister and Minister of Mining and Energy, Zorana Mihajlovic has many times underlined that long-term energy security is not possible without new investments in renewable energy sources.

“There has never been more talk about RES, it has never been more important in the world to work as much as possible on increasing production capacities that use renewable sources,” she said. “Last year was a world record in terms of capacity growth of 6 per cent, this year is expected to grow by 8 per cent and it shows that regardless of the crisis, the whole world is turning to the energy transition, green transition and RES development because it is one of the main opportunities to make countries more energy-safe.”

Finally, a Biomethane Action Plan will set out tools including a new Biomethane Industrial Alliance and financial incentives to increase production to 35 bcm by 2030, including through the Common Agricultural Policy.

At the heart of the Plan, there is the Recovery and Resilience Facility (RRF), which will support coordinated planning and financing of cross-border and national infrastructure as well as energy projects and reforms.

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