EU offers a plan to exit Russia’s energy

The plan is in response to a pledge to reduce reliance on energy made by EU leaders at the Versailles summit in March, a senior European Commission official said.

Liquefied natural gas

The plan presented by the EC on the afternoon of May 18 is an important transformation: For a bloc that has been accustomed to cheap and reliable supplies from Russia for decades, stopping imports altogether will entail enormous challenges. to diversify suppliers, restructure infrastructure, minimize price increases, increase efficiency, promote renewable alternatives and, above all, ensure households and factories remain power supply without interruption.

Russian coal has been sanctioned by the EU and Russian oil is in the process of considering sanctions, so the attention is on gas. Russia is the EU’s main gas supplier, accounting for 45% of total gas supplies – 155 billion cubic meters – in 2021. Brussels is well aware that this huge gas will not disappear or be replaced by other gas sources. Green products will be produced overnight, so the bloc’s top priority is to find gas elsewhere to fill the gap, Euro News said.

Liquefied natural gas (LNG) emerges as the most readily available solution to the current situation. LNG is gas that is cooled, transported by ship, and then unloaded at complex warehouses to turn the liquid back into a gas. This gives a great advantage to coastal countries with LNG storage such as Spain, Italy and the Netherlands, and can increase purchases from these countries relatively easily. The EU has broken its LNG import record since early 2022, reaching 12.4 billion cubic meters in April.

However, LNG is very expensive and the global market is very competitive. The focus on LNG also puts the landlocked EU countries at a disadvantage because they do not have access to ports and are forced to source gas through pipelines, most of which are operated by Russia.

REPower EU believes that up to two-thirds of Russia’s gas – about 100 billion cubic meters – could be cut by the end of the year. Half of this – 50 billion cubic meters – will be replaced by LNG diversification, while 10 billion cubic meters will come from non-Russian pipelines, including pipelines from Norway, Azerbaijan and Algeria.

Buy together

To overcome the fierce competition for LNG in the world, Brussels wants the 27 member states to buy as a sole customer and leverage the world’s largest single market. EU Energy Platform – voluntary scheme to aggregate demand and coordinate imports. Brussels aims to go further and create a “joint purchase mechanism” to negotiate gas contracts on behalf of member states. This mechanism is voluntary and builds on the experience from purchasing COVID-19 vaccines that the Commission has coordinated to obtain millions of doses at affordable prices while avoiding competition between countries.

Green energy

REPower EU is seen as an additional layer of the European Green Agreement and has a distinct focus on renewable energy. The European Commission proposes to accelerate the deployment of solar and wind energy systems with the aim of replacing more than 20 billion cubic meters of Russian gas by the end of the year. But this goal also faces obstacles. On average, wind turbine farms take 9 years to complete while solar panels take 4-5 years to install. The process is complex and requires multiple licensing to building, energy, environmental and architectural standards.

In the new recommendation, Brussels asks member states to speed up progress significantly and to establish binding maximum deadlines for all relevant phases. At the same time, the Commission proposes to update the EU’s renewable target for 2030, from 40% to 45% of total energy production across the bloc, and to mandate the use of solar panels in all public buildings. community and new residential buildings by 2027.

The EU REPower plan is expected to be quite expensive: Independence from Russian energy costs an additional 210 billion euros between 2022 and 2027. More than 110 billion euros are spent on the deployment of renewable energy and hydrogen systems. The commission estimated the cost of oil infrastructure reclamation at €2 billion.

Brussels proposes that most of this money should come from the unused loans of the COVID-19 recovery fund.