Tuesday, May 17, 2022

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EU presents plan to become independent from Russian energy sources

The European Commission has proposed an outline of a plan to make Europe independent from Russian fossil fuels, starting with gas, in light of Russia’s invasion of Ukraine and following the International Energy Agency’s (IEA) targeted measures to reach the same goal. The plan also outlines a series of measures to respond to rising energy prices in Europe and to replenish gas stocks for next winter.

According to the Commission, phasing out our dependence on fossil fuels from Russia can be done well before 2030.

“We must become independent from Russian oil, coal and gas,” said Commission President Ursula von der Leyen.

Indeed, the EU imports 90 per cent of its gas consumption, with Russia providing more than 40 per cent of the EU’s total gas consumption. Russia also accounts for 27 per cent of oil imports and 46 per cent of coal imports.

“We simply cannot rely on a supplier who explicitly threatens us,” continued Mrs von der Leyen. “We need to act now to mitigate the impact of rising energy prices, diversify our 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.”

The two pillars of the REPowerEU plan

To do so, the Commission is proposing to develop a REPowerEU plan that will increase the resilience of the EU-wide energy system based on two pillars: 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; on the other hand, by reducing faster the use of fossil fuels in our homes, buildings, industry and power system; by boosting energy efficiency, increasing renewables and electrification and addressing infrastructure bottlenecks.

Full implementation of the Commission’s Fit for 55 proposals would already reduce the EU’s annual fossil gas consumption by 30 per cent, equivalent to 100 billion cubic metres (bcm), by 2030. 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, read the press statement, ending the EU’s overdependence on a single supplier.

An unprecedented LNG supply to the EU in January 2022 has ensured the security of gas supply for this winter. The EU could import 50 bcm more of LNG (for example from Qatar, the US, Egypt, West Africa) on a yearly basis. Diversification of pipe sources (from Azerbaijan, Algeria, Norway) could deliver another 10 bcm of yearly savings on Russian gas imports.

Also, doubling the objective of Fit for 55 for biomethane would lead to the production of 35 bcm per year by 2030.

Unlocking hydrogen potential and boosting renewables

Regarding hydrogen, an additional 15 million tonnes (mt) of renewable hydrogen on top of the 5,6 mt foreseen under the Fit for 55 can replace 25-50 bcm per year of imported Russian gas by 2030. This would be made of an additional 10 mt of imported hydrogen from diverse sources and an additional 5 mt of hydrogen produced in Europe, going beyond the targets of the EU’s hydrogen strategy and maximising the domestic production of hydrogen. Other forms of fossil-free hydrogen, notably nuclear-based, also play a role in substituting natural gas.

To unlock this potential, the Commission will further develop the regulatory framework to promote a European market for hydrogen and support the development of an integrated gas and hydrogen infrastructure, hydrogen storage facilities and port infrastructure.

energy sources
Fran Timmermans. Photo: Abdesslam Mirdass/European Union 2022.

“It is time we tackle our vulnerabilities and rapidly become more independent in our energy choices,” added Executive Vice-President for the European Green Deal, Frans Timmermans. “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. Putin’s war in Ukraine demonstrates the urgency of accelerating our clean energy transition.” 

The Fit for 55 already foresees the doubling of the EU’s photovoltaic and wind capacities by 2025 and tripling by 2030, saving 170 bcm of yearly gas consumption by 2030. By accelerating the rollout of rooftop solar PV systems by up to 15 terawatt-hours (TWh) this year the EU could save an additional 2,5 bcm of gas.

Moreover, the Commission intends to present by April a legislative proposal requiring underground gas storage across the EU to be filled up to at least 90 per cent of its capacity by 1 October each year. The proposal would entail the monitoring and enforcement of filling levels and build in solidarity arrangements between Member States. The Commission is continuing its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom.

Regarding the mitigation of high energy prices, the Commission’s Energy Prices Toolbox from last October will remain an important framework for national measures. Also, the Commission is presenting Member States with additional guidance, confirming the possibility to regulate prices in exceptional circumstances and setting out how Member States can redistribute revenue from high energy sector profits and emissions trading to consumers. 

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