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Quotes by TradingView

IEA provides 10-point plan for EU to reduce reliance on Russian gas

11 Mar, 2022
162



The International Energy Agency’s new analysis shows the European Union could reduce its imports of Russian natural gas by more than one-third within a year through a combination of measures that would be consistent with the European Green Deal and support energy security and affordability.

 

The 10-Point Plan to Reduce the European Union’s Reliance on Russian Natural Gas includes a range of complementary actions that can be taken in the coming months, such as turning more to other suppliers, drawing on other energy sources, and accelerating efforts to provide consumers, businesses and industry with the means to use clean and efficient alternatives to natural gas.

 

The proposed measures are fully consistent with the EU’s European Green Deal and its Fit for 55 package, paving the way for further emissions reductions in the years to come.

 

In 2021, the EU imported 155 billion cubic metres of natural gas from Russia, accounting for around 45 per cent of EU gas imports and close to 40 per cent of its total gas consumption.

 

Progress towards Europe’s net zero ambitions will bring down its use and imports of gas over time, but the current crisis raises the specific question about imports from Russia and what more can be done in the immediate future to bring them down.

 

IEA executive director Fatih Birol said nobody was under any illusions anymore.

 

Birol continued: “Russia’s use of its natural gas resources as an economic and political weapon show Europe needs to act quickly to be ready to face considerable uncertainty over Russian gas supplies next winter.

 

“The IEA’s 10-point plan provides practical steps to cut Europe’s reliance on Russian gas imports by over a third within a year while supporting the shift to clean energy in a secure and affordable way.

 

“Europe needs to rapidly reduce the dominant role of Russia in its energy markets and ramp up the alternatives as quickly as possible.”

 

European Commissioner for Energy Kadri Simson said reducing the EU’s dependence on Russian gas was a strategic imperative.

 

Simson added: “In recent years, we have already significantly diversified our supply, building LNG terminals and new interconnectors.

 

“But Russia’s attack on Ukraine is a watershed moment.”

 

The key actions recommended in the IEA’s 10-point plan include not signing any new gas contracts with Russia; maximising gas supplies from other sources; accelerating the deployment of solar and wind; making the cost of existing low emissions energy sources, such as nuclear and renewables; and ramping up energy efficiency measures in homes and businesses.

 

Taken together, these steps could reduce the EU’s imports of Russian gas by more than 50 billion cubic metres, or more than one-third, within a year, according to IEA estimates.

 

This takes into account the need for additional refilling of European gas storage facilities in 2022.

 

Many of the actions recommended in the plan – including stepping up energy efficiency measures, accelerating renewable deployment, and expanding low emissions sources of power system flexibility – are key elements of the IEA’s Roadmap to Net Zero by 2050.

 

The IEA analysis notes that other avenues are available to the EU if it wishes or needs to reduce reliance on Russian even more quickly – but with significant trade-offs.

 

The major near-term option would involve switching away from gas consumption in the power sector via increased use of Europe’s coal-fired fleet or by using alternative fuels, such as oil, within existing gas-fired power plants.

 

Given these alternatives to gas use are not aligned with the European Green Deal, they are not included in the 10-point plan – they may also be costly from an economic point of view.

 

Reducing reliance on Russian gas will not be simple for the EU, requiring a concerted and sustained policy effort across multiple sectors, alongside strong international dialogue on energy markets and security.

 

There are multiple links between Europe’s policy choices and broader global market balances.

 

Strengthened international collaboration with alternative pipeline and LNG exporters – and with other major gas importers and consumers – will be critical.

 

Clear communication between governments, industry and consumers is also an essential element for successful implementation.

 

The 10-point plan:

  1. Do not sign any new gas supply contracts with Russia – enables greater diversification of supply this year and beyond.
  2. Replace Russian supplies with gas from alternative sources – increases non-Russian gas supply by around 30 billion cubic metres within a year.
  3. Introduce minimum gas storage obligations – enhances resilience of the gas system by next winter.
  4. Accelerate the deployment of new wind and solar projects – reduces gas use by 6 million cubic metres within a year.
  5. Maximise power generation from bioenergy and nuclear – reduces gas use by 13 billion cubic metres within a year.
  6. Enact short-term tax measures on windfall profits to shelter vulnerable electricity consumers from high prices.
  7. Speed up the replacement of gas boilers with heat pumps – reduces gas use by an additional 2 billion cubic metres within a year.
  8. Accelerate energy efficiency improvements in buildings and industry – reduces gas use by close to 2 billion cubic metres within a year.
  9. Encourage a temporary thermostat reduction of one degree Celsius by consumers – reduces gas use by some 10 billion cubic metres within a year.
  10. Step up efforts to diversify and decarbonise sources of power system flexibility – loosens the strong links between gas supply and Europe’s electricity security.

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