On March 8, the European Commission proposed an outline of a plan to make Europe independent from Russian fossil fuels well before 2030, starting with gas, in light of Russia's invasion of Ukraine.
Russia provided around 45% of the EU's total gas imports in 2021, followed by Norway (23%), Algeria (12%), the United States (6%) and Qatar (5%).
This plan 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.
REPowerEU will seek to diversify gas supplies, speed up the roll-out of renewable gases and replace gas in heating and power generation. This can reduce EU demand for Russian gas by two thirds before the end of the year.
Commission President Ursula von der Leyen said: “We must become independent from Russian oil, coal and gas. We simply cannot rely on a supplier who explicitly threatens us.
“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.
“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.”
Executive Vice-President for the European Green Deal, Frans Timmermans said: “It is time we tackle our vulnerabilities and rapidly become more independent in our 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.
“Putin's war in Ukraine demonstrates the urgency of accelerating our clean energy transition.”
Commissioner for Energy, Kadri Simson, said: “Russia's invasion of Ukraine has aggravated the security of supply situation and driven energy prices to unprecedented levels.
“For the remaining weeks of this winter, Europe has sufficient amounts of gas, but we need to replenish our 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.”
Emergency measures on energy prices and gas storage
The European Commission's ‘Energy Prices Toolbox' from last October has helped Member States to mitigate the impact of high prices on vulnerable consumers and it remains an important framework for national measures.
Today 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.
EU State Aid rules also offer Member States options to provide short-term support to companies affected by high energy prices, and help reduce their exposure to energy price volatility in the medium to long term.
Following a consultation on targeted amendments to the Emission Trading System State aid Guidelines, the Commission will also be consulting with Member States on the needs for and scope of a new State aid Temporary Crisis Framework to grant aid to companies affected by the crisis, in particular those facing high energy costs.
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% 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 continues its investigation into the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom.
To address the skyrocketing energy prices, the Commission 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.
REPowerEU – eliminating our dependence on Russian gas before 2030
Phasing out our dependence on fossil fuels from Russia can be done well before 2030.
To do so, the Commission proposes 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; and, 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 our annual fossil gas consumption by 30%, 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, ending the EU's overdependence on a single supplier.
The Commission proposes 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.
Background
The new geopolitical and energy market reality requires us to drastically accelerate the clean energy transition and increase Europe's energy independence from unreliable suppliers and volatile fossil fuels.
Following the invasion of Ukraine, the case for a rapid clean energy transition has never been stronger and clearer.
The EU imports 90% of its gas consumption, with Russia providing around 45% of those imports, in varying levels across Member States. Russia also accounts for around 25% of oil imports and 45% of coal imports.
The Commission's Energy Prices Toolbox of October 2021 has been helping citizens and businesses to face high energy prices in recent months.
25 Member States have adopted measures in line with the toolbox which are already easing energy bills for over 70 million household customers and several million micro, small and medium-sized enterprises.
The Commission continues to work with neighbours and partners in the Western Balkans, and in the Energy Community, which share the EU's fossil fuel dependencies and exposure to price hikes, while also having committed to the same long term climate goals.
For Ukraine, Moldova and Georgia, the EU stands ready to provide support to ensure reliable and sustainable energy.
The ongoing effort to provide for an emergency synchronisation of the Ukrainian and Moldovan electricity grids with the continental European grid is a clear token of this commitment.
Click Here for the complete announcement.
Resource Links:
-- REPowerEU: Joint European Action For More Affordable, Secure And Sustainable Energy
NewsClips:
-- BBC: EU Unveils Plan To End Reliance On Russian Gas
-- Bloomberg: EU Maps Out Plan To Replace Russian Gas On Threat Of Cut-Off
-- Financial Times: EU Plans To Cut Russian Gas Imports By Two-Thirds In A Year
-- Bloomberg: Solar Firms Jump As U.S. And U.K. Move To Ban Russia Oil Imports
-- Bloomberg: Hackers Targeted U.S. LNG Producers In Run-Up To Ukraine War
-- The Guardian: ‘This Is A Fossil Fuel War’: Ukraine’s Top Climate Scientist Speaks Out
-- Reuters: Oil Falls Towards $125 As Investors Weigh U.S. Import Ban
Related Articles:
-- PA Natural Gas Politicians Want To ‘Unleash’ PA’s Gas Industry - What We Need First Is For Industry To Take Up The Slack; Oil & Gas 2.0; True Energy Independence
-- The Atlantic: America Is The World’s Largest Oil Producer, So Why Is Losing Russia’s Oil Such A Big Deal? "...under the U.S. oil industry as it exists today, there is no way to spin up new oil production in a few weeks or months. But more important, it means that U.S. oil companies have developed the opposite of independence.
“Since Congress lifted the ban on oil exports in 2015, all American-drilled oil and some of our natural gas have been priced on the international market. Global market forces, not our abundance of domestic fossil fuels, set the price of oil and gasoline in the United States."
"Market dynamics, not overzealous regulations, have imprisoned the industry. That hasn’t stopped lobbyists from pretending otherwise.”
“Energy independence was not an awful goal. But true independence cannot be achieved by the market alone.
“The U.S. ensures that its food supply, timberlands, and water quality are not administered solely by the market.
“That same philosophy can apply to two of its most important natural resources: its fossil fuels and its climate.
“The first goal can be achieved through more aggressive management of the industry; the second, by a phaseout of fossil fuels altogether.
“Only through such stewardship can the United States secure the true dividends of prosperity and freedom.”
-- WSJ: Shale Oil Companies Say There Are Limits To How Much, How Quickly They Can Boost Oil Supplies Due To Supply Chain Issues, Wary Investors, Shortages Of Labor, Sand, Equipment; Will Take A Good 18 Months Just To Ramp Up - “There’s only about a 10-year inventory of shale [oil] drilling locations left, maybe 15”
-- White House: Remarks By Biden Announcing Russian Oil Ban - “In the United States, 90 percent of onshore oil production takes place on land that isn’t owned by the federal government. And of the remaining 10 percent that occurs on federal land, the oil and gas industry has millions of acres leased. They have 9,000 permits to drill now. They could be drilling right now, yesterday, last week, last year. They have 9,000 to drill onshore that are already approved.” [40% of unconventional gas drilling permits issued by DEP in Pennsylvania haven’t been used.]
-- DEP Budget Hearing: Unconventional Natural Gas Industry Didn’t Drill 40% Of The Wells It Had DEP Permits For
-- Financial Times: Biden Administration Ratchets Up Pressure On U.S. Shale Producers To Increase Supply To Tame Oil Prices
-- Reuters: OPEC Meets With U.S. Shale Executives As Oil Prices Skyrocket
[Posted: March 9, 2022] PA Environment Digest
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