The European Commission is setting the wheels in motion to ensure Europe is independent of Russian fossil fuels, starting with gas, well ahead of 2030 in light of the military attacks in Ukraine.
The EU has proposed an outline of its new plan which unveils the various measures required to respond to rising energy prices in Europe and to replenish gas stocks for next winter.
While energy costs have been on the rise in Europe for the last few months, the additional supply uncertainty is causing more issues. The EU imports 90 per cent of its gas consumption, with Russia providing around 45 per cent of those imports, in varying levels across Member States. Russia also accounts for around 25 per cent of oil imports and 45 per cent of coal imports.
Joint European action for more affordable and sustainable energy comes in the form of REPowerEU, which will seek to diversify gas supplies, accelerate the roll-out of renewable gases and replace gas in heating and power generation. Such a move could lower EU demand for Russian gas by two thirds before the end of 2022.
Ursula von der Leyen, Commission President, 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.”
Frans Timmermans, Executive Vice-President for the European Green Deal, 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.”
The Commission is presenting Member States with extra guidance, in addition to last October’s ‘Energy Prices Toolbox’ framework. The toolbox, which had measures adopted by 25 member states to ease bills, has been helping citizens and businesses to face high energy prices in recent months.
The new guidance will confirm the possibility of regulating prices in exceptional circumstances and sets out how Member States can redistribute revenue from high energy sector profits and emissions trading to consumers.
Member States may also be offered options to provide short-term support to firms hit by high energy prices and help them in the medium to long term by reducing exposure to unpredictable energy prices, according to EU State Aid rules.
The Commission will also consult with the Member States on the requirements for a new State aid Temporary Crisis Framework to support companies affected by the crisis.
By April, the Commission will present 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 Commission will continue to investigate the gas market in response to concerns about potential distortions of competition by operators, in particular Gazprom.
The Commission will also look at options to optimise the electricity market design to keep electricity affordable, without disrupting supply and further investment in the green transition.
The REPowerEU plan is based on two pillars – diversifying gas (by using higher Liquefied Natural Gas, pipeline imports and larger amounts of biomethane and renewable hydrogen instead) and reducing the use of fossil fuels at greater speed (by boosting energy efficiency, addressing infrastructure challenges and increasing renewables and electrification).
Sticking to measures laid out in the plan could gradually remove fossil gas use, equivalent to the volume imported from Russian 2021, and nearly two-thirds of that reduction can be achieved within a year, ending the EU's overdependence on a single supplier.
The EU is poised ready to provide support for Ukraine, Moldova and Georgia, 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 indicative of the high level of commitment.
Harco Leertouwer, Managing Director Europe, Acre, said: “Both energy saving and the use of alternative energy sources are methods to become independent of Russia as the main supplier. Liquid gas is also an interim alternative, and the accelerated deployment of hydrogen gas must be part of the strategy. What we absolutely must avoid is a temporarily increased electricity production from coal, which would cause additional climate damage. The key to independence lies in a dedicated European sustainable energy strategy. For this, it is imperative that the Green Deal will be implemented with increased speed.”
Harco J. Leertouwer leads the team responsible for the business in Continental Europe and is based in Amsterdam, Netherlands. Harco brings in a wealth of executive search and international business growth experience, having been a Director of Michael Page in Germany and Managing Director for Badenoch & Clark Germany and the Netherlands. Before joining Acre, Harco set up his own executive search boutique, focusing on Sustainability, Renewable Energy and Clean Technology.
Harco holds an MBA, having graduated in Corporate Social Responsibility at the prestigious Henley Management College (Henley-on-Thames, U.K.). Moreover, Harco is an active member of the Climate Reality Project, a diverse group of passionate individuals who have come together to solve the greatest challenge of our time. Harco was trained by the Institute’s founder, Nobel Peace Prize laureate and former US Vice President Mr. Al Gore. Harco is of Dutch nationality and is fluent in Dutch, English and German.