Photo: Sergei Ilnitsky / EPA-EFE
Europe needs to build up its renewable energy capacity and diversify its gas supply to end its dependency on Russian gas, according to a leaked draft of the EU communication on energy prices seen by EURACTIV.
Europe is in the throes of an energy crisis, mostly driven by high gas prices. The outbreak of war in Ukraine has only worsened this, highlighting Europe’s reliance on imports for 90% of its gas, 40% of which Russia controls.
“This dependency has aggravated the current situation of high energy prices, which continues to impact European households and businesses,” the leak said.
The communication, originally due to be published on Wednesday (2 March), was meant to look at alleviating the impact of continued high energy prices in Europe and how to prevent this in the future.
However, the Russian invasion of Ukraine meant the European Commission had to delay and redraft the communication. It is now expected next week and a leaked draft shows the perspective has shifted to decreasing Europe’s energy dependency on Russia.
“With the EU gas storages at historically low levels and security of supply concerns linked to low debit in the gas pipelines from the East, we witness a growing gas crisis. The EU remains highly dependent on energy imports for power generation and heating,” the draft warns.
It follows European Commission President Ursula von der Leyen calling for an acceleration of the green transition during a meeting between the European Union and Ukrainian President Volodymyr Zelenskiy on Tuesday.
“Every kilowatt-hour of electricity Europe generates from solar, wind, hydropower or biomass reduces our dependency on Russian gas and other energy sources,” von der Leyen said.
“This is a strategic investment because, on top, less dependency on Russian gas and other fossil fuel sources also means less money for the Kremlin’s war chest,” she added.
The draft lays out several “actions” to break away from Russian energy. These include diversifying the gas supplies of Europe and a “new energy compact” that would boost renewable energy across the bloc.
Diversifying the gas supply of Europe
While Europe will be able to make it through this winter thanks to gas in storage and liquified natural gas (LNG) deliveries, it needs to continue looking for alternatives to Russian gas, according to the Commission.
“Reducing our dependence on a single supplier of fossil gas requires diversification of gas supply and using the full potential of green and low carbon energy sources,” reads the draft.
In the short term, this diversification will be in the form of more LNG, shipped from countries like the US and Qatar.
Europe has been working hard to increase its supply of LNG alternatives to Russian gas. Each EU region now has a direct or indirect connection with an LNG terminal and supplies reached their highest ever level in January.
“LNG, which can be transported by ship or by road, has proven to be an important element in reducing our dependence on imported Russian gas and strengthening security of supply,” says the draft.
It adds that the Commission will continue international talks and build on the current EU share of the global market, which is currently around 15%.
But more needs to be done. To avoid the same issue with historically low storage that occurred this winter, Europe average storage should be at least 80% by 30 September 2022, according to the draft.
The Commission will propose a mechanism to ensure action is taken if storage rates are not sufficient to reach that target. It is also considering proposing a legal requirement for EU countries to ensure a minimum level of storage is achieved by 30 September each year.
In the long term, the Commission aims to increase the amount of alternative gases, like biogas and hydrogen. The draft suggests an ambition to produce 35 billion cubic metres of biogas by 2030.
Meanwhile, to accelerate the roll-out of renewable hydrogen, the Commission will deploy a so-called “Hydrogen Accelerator”, including a swift implementation of the December gas package and treating state aid approval for hydrogen projects as a matter of priority.
Even with this, the EU will also need to import 10 million tonnes of green hydrogen by 2030, according to the draft.
‘New energy compact’
Electrification and renewable power are also key to reducing the reliance of Europe on Russia. If the EU were to fully implement its climate legislation for 2030, it would reduce the reliance on gas by 23% by the end of the decade, according to the draft.
To boost renewables in Europe, the draft talks about a “new energy compact” – a joint effort across Europe to roll out more renewable energy capacity.
“To frontload the security of supply benefits of the European Green Deal and reduce our dependence on a dominant supplier for natural gas imports, the New Energy Compact will scale up renewable energy in Europe by mobilising additional investments, removing roadblocks to renewables roll-out and empowering consumers to play an active role in the energy market.”
As part of this, EU countries should ensure that investments in renewables and related grid infrastructure are considered in the public interest and given the most favourable planning and permitting procedure available.
These investments in renewables can come from multiple areas, but the draft suggests using additional revenues from Europe’s emissions trading scheme, made due to the unexpectedly high carbon price, and windfall profits of companies that have profited from the crisis.
However, EU countries should “refrain from fiscal measures targeting high rents that would otherwise be reinvested in renewable energy”.
Countries should also tackle “overly complex administrative procedures”, like permitting processes, that delay investment in renewable energy. To do this, EU countries should look at several areas, including spatial planning for onshore and offshore renewables.
Another element of this renewables boost is creating ‘active consumers’ who use power when there is less demand and it is cheaper. This requires a quicker deployment of smart metres and EU countries should put in place one stop shops to advise on this, says the draft.
Alongside this, there needs to be a focus on heating and building renovation to reduce the amount of energy Europe needs – European buildings use around 40% of the total energy consumed by the bloc.
If the EU were to implement the recent energy efficiency and renovation legislation, it would deliver 17 billion cubic metres of gas savings by 2025.