EU countries are scrambling for new sources of gas to phase out Russian fossil fuels and punish Moscow for its brutal war in Ukraine. But in the rush to diversify, Europe once again risks overlooking a no-regret solution: energy conservation.
In its REPowerEU plan outlined last month, the European Commission estimated that 10 billion cubic meters (bcm) of gas could be saved by next winter if all households turned down their thermostats by 1°C. Frontloading deployment of rooftop solar panels and heat pumps could shave off a further 2.5 and 1.5 bcm respectively by the end of this year, the EU executive said.
These efforts are laudable but they pale in comparison to the 155 bcm of gas that the EU imported from Russia last year. And alternative supplies of liquified natural gas from the US or Qatar will not be sufficient to plug the gap.
If Russian gas goes missing next winter, Europeans will therefore have to prepare for rationing.
Gas rationing will hit people where it hurts most: right in their very homes. Gas is the dominant source of energy for households (32.1%) with the residential sector – mostly heating – accounting for most EU gas demand (40%), followed by industry and gas use for power generation, according to the EU agency for the cooperation of energy regulators (ACER).
The reduction of gas consumption in buildings must therefore become an urgent political priority. And yet, efficiency is still the neglected child of EU energy policy. Energy-saving targets have so far never been imposed as a legal obligation on EU member states, and have consistently been missed as a result.
The barriers are well-known: insulating millions of individual homes scattered across dozens of European countries and switching them to renewable heating systems takes time and is fraught with practical complications. Support for homeowners and financial incentives are not enough to spur renovation at the speed and scale required. These are colossal efforts that are best planned over decades, not months.
Yet the economic case for saving energy has never been stronger. The latest research by Fraunhofer, a German public institute, shows that energy savings have become more attractive economically as energy prices rise. Gas prices have multiplied sixfold in the first quarter of 2022 compared to one year earlier, so assuming a doubling of energy prices until 2030 seems plausible, if not conservative. This means the EU could aim for energy savings of 23% by 2030 instead of the 9% proposed in the European Commission’s revised energy efficiency directive tabled last year, the German researchers found.
“The EU can and must increase its energy-saving ambition. It will keep our energy bills in check and accelerate the phase-out of Russian oil and gas,” said Stefan Scheuer, a consultant who reviewed the research.
There are many things people can do to lower their energy consumption, which come at zero cost: Over the years, people have become accustomed to heating their homes at an average of 22°C, instead of 18°C, Scheuer says. Hot water usage could also easily be reduced if promoted in nationwide campaigns to limit the time people spend under the shower. In Germany and other EU countries, pressure is building on governments to enforce new speed limits on motorways in order to save petrol.
The savings potential does not only reside on the demand side. By capturing gas that is vented or flared in North Africa, Europe could substitute up to 15% of Russian gas within one or two years, according to research published last month. Globally, venting or flaring represents some 260 bcm of gas annually – or 1.7 times the amount Europe imports from Russia every year, the study found.
The European Commission acknowledges that the ‘energy efficiency first’ principle should be prioritised, saying it is “more relevant than ever” to decrease reliance on Russian gas. In fact, the EU executive is already reconsidering the basic economic assumptions behind its proposed energy efficiency target in view of the skyrocketting energy prices fuelled by Russia’s war in Ukraine.
But politicians at both the EU and national level must hurry up and make a positive case for energy savings now – alongside rolling out massive subsidies to accelerate building renovation, clean heating solutions and solar panels.
Otherwise, energy conservation measures will have to be imposed on the population, and voters will not miss the opportunity to punish governments next time they go to the polls.
– Frédéric Simon
After a one-week interruption for Easter, we’re back to give you a round-up of energy and environment-related news from the heart of the EU. The mood in Brussels hasn’t changed fundamentally while we were away. The focus is still very much on the Ukraine war and Europe’s efforts to abandon its addiction to Russian fossil fuels. Read our news digest below to find out about the latest.
More stories:
COPENHAGEN. Danish PM: Become greener to weaken Putin. Denmark will stop reliance on natural gas by 2030 even though this means production will increase in the short-term, the Danish government announced on Tuesday (19 April).
“When we become greener, we weaken Putin. And when we become greener, we slow down the climate change that is destroying our planet,” said Prime Minister Mette Frederiksen. Read more.
ATHENS. Greeks pay the highest electricity price in the EU. Greece has had the highest electricity price in the EU for two consecutive days, according to the EU Day-Ahead Market Prices. The government vows to take further measures to tackle an escalating energy crisis, while the opposition urges action against the “energy cartel”. Read more.
ROME. Italy looks to Congo and Angola in mission to cut gas dependency on Moscow. Prime Minister Mario Draghi and the Republic of Congo President Dénis Sassou N’Guesso agreed on the “wide potential of the bilateral partnership, particularly in the energy sector”, Palazzo Chigi, Italy’s Council of State seat, said in a note on Tuesday. Read more.
LISBON. Economy minister: ‘Windfall tax’ off table for now. Portugal’s government is currently not considering increasing tax on companies making extraordinary profits in a bid to support those that are struggling from the effects of the war in Ukraine, Portugal’s Economy Minister Antonio Costa Silva said on Tuesday. Read more.
BERLIN. Social Democrats back Nord Stream 2 advocate. Social Democrats in the Bundestag have come to the defence of party elder Manuela Schwesig, the regional leader of Mecklenburg-Vorpommern and, until recently, a leading advocate for the Nord Stream 2 pipeline after she was asked to step down. Read more.
BRATISLAVA. Slovaks support measures reducing energy consumption. Slovaks mostly support individual measures reducing oil and gas consumption as long as they receive discounts in return, a new survey conducted by the MNFORCE agency in cooperation with the Slovak Academy of Sciences has found. Read more.
ROME. Draghi to skip ‘gas tour’ in Africa after testing positive for COVID-19. Italian Prime Minister Mario Draghi will not be able to participate in a mission to Angola and Congo scheduled for 20-21 April after he tested positive for COVID-19 but remains asymptomatic, his office said on Monday. The mission’s objective is to reach new energy agreements to cut the country’s reliance on Russian gas following Moscow’s invasion of Ukraine.
The delegation representing the Italian government in the missions to Angola and the Republic of Congo will be headed by Foreign Minister Luigi Di Maio and Ecological Transition Minister Roberto Cingolani. (Margherita Montanari | EURACTIV.it)
TIRANA. Albania could be gas hub of the Balkans with new US deal. Albania could be a key player in Europe’s gas sector as US company Excelerate Energy Inc plans to use it as a way to deliver natural gas and natural gas products to the rest of the region, as the country also looks at increasing interconnectors amid the global energy crisis.
But the plan might not sit well with environmental organisations who recently called on the European Commission and regional governments to avoid gas, and invest in renewable energy such as solar and wind. Read more.
BUCHAREST. Romanian government makes offshore law more investor-friendly. The governing coalition agreed to adopt changes to the current offshore law, making it more favourable to investors and allowing it to help unblock the exploitation of gas reserves in the Black Sea. Read more.
ROME. Italy’s centre-left slams government cooperation on gas with Egypt. The possible agreement for a gas supply with the el-Sisi government in Egypt “leaves many doubts” considering the developments of the Regeni case, Democratic Party Secretary Enrico Letta told Radio Rai Uno on Thursday. Read more.
EU. Europe prepares to live without Russian energy. As a ban on Russian oil and gas imports is increasingly on the horizon, member states are preparing their plans and strategies for life without them. Read more.
BELGRADE. Serbian company NIS sees potential takeover by Azerbaijani SOCAR Company. The State Oil Company of Azerbaijan (SOCAR) is interested in buying out a controlling stake in oil and gas company Naftna Industrija Srbije (NIS) and has been in contact with NIS’ majority owner, Russian state company Gazprom Neft, and the Serbian government, the Demostat.rs website has reported. Read more.
CENTRAL EUROPE. Central Europeans to boost hydrogen grid. Gas transmission system operators (TSOs) from Slovakia, Romania, Hungary, and Poland agreed to a strategic partnership to develop the region’s hydrogen grid. According to the partnership agreement, the companies will also cooperate on decarbonisation, developing green gases, and exploring CO2’s possibilities. Read more.
ZAGREB. EIB to support Croatian renewable energy storage capacity projects. The EU Investment Bank will finance and support projects to construct storage facilities for renewable energy, the Global Relationship Manager in Croatia, Olga Pascenco, said on Tuesday. Read more.
ZAGREB. Request for allocation of new capacity of LNG terminal on Krk. The LNG Croatia company stated on Monday that existing and prospective clients could submit proposals to allocate new free capacities for the regasification of liquefied natural gas (LNG) at this facility at Omišalj on the Croatian island of Krk. Read more.
Italy, Algeria sign gas supply deal. Italy and Algeria agreed to boost gas supply to Italy to cut reliance on Russian gas after Italian Prime Minister Mario Draghi met with Algerian President Abdelmadjid Tebboune in Algiers on Monday. Read more.
LISBON. Portugal to support any EU sanction on Russian oil. Portugal will support the EU’s proposal to include oil in the sanctions against Russia, Foreign Minister João Gomes Cravinho said in Luxembourg on Monday. Read more.
ATHENS. Bulgaria and Greece advance nuclear project talks. Bulgaria and Greece have progressed in their talks about constructing a nuclear power plant, but the liability issue in case of an accident remains unresolved, according to EURACTIV’s partners in Sofia and Athens. Read more.
BERLIN. Bavaria wants to reconsider fracking amidst surging gas prices. Bavarian Minister-President Markus Söder said on Sunday that the usage of the controversial fracking technology to produce liquified natural gas (LNG) should be evaluated to boost the European attempt to phase out Russian gas imports. Read more.
EU carbon market reform vote in Parliament. On 20 April, the European Parliament’s energy and industry committee (ITRE) will vote on its proposed amendments to the EU’s revised carbon market, the Emissions Trading Scheme. While the Parliament’s environment committee (ENVI) has the main responsibility for the ETS revision, ITRE has joint responsibility when it comes to one key issue: free emissions allowances.
Energy-intensive industries like cement, steel and chemicals currently receive most of the ETS allowances for free, a system meant to prevent them from relocating abroad but which also removes incentives to decarbonise. With 16 other NGOs, WWF has sent a letter to ITRE MEPs, calling for free allocation of ETS allowances to be scrapped as soon as possible.
“While other sectors are now having to do their bit for the climate, these industries are stuck in a polluting time warp. And if nothing changes, a whopping 94% of their carbon emissions will still be covered by free allowances up to 2030. It’s time for the EU to take this crazy out-dated system in hand and ensure that all polluters must pay, and that ETS allowances are used to finance the green transition,” said Camille Maury from the WWF’s European Policy Office.
The Parliament’s environment committee will vote on the ETS revision on 16-17 May. A plenary vote expected in June. (Frédéric Simon | EURACTIV.com)
Greece to speed up gas exploration, optimistic of significant reserves – PM says. Greece will speed up gas exploration projects in concert with private investors, its prime minister said on Tuesday (12 April), as it seeks to become an energy hub in Europe. Prime Minister Kyriakos Mitsotakis said that the country aims to have a clear idea by 2023 on whether it has gas reserves it could use and that it has indications of potential gas reserves which makes the government “optimistic”.
“If we have significant gas reserves, we will replace our imports with our national wealth,” he said in a meeting with the country’s hydrocarbons commission and energy industry executives. (EURACTIV.com with Reuters)
26 APRIL. CBAM – How do we ensure that we cut emissions – not move them? Join this EURACTIV Virtual Conference to discuss the challenges faced by the CBAM to ensure EU Green Deal ambitions can truly avoid carbon leakage. Speakers include Pasquale De Micco from DG TAXUD and Maria Spyraki MEP. Full programme and registration here. (Supported by Yara)
27 APRIL. EU ETS: How to mitigate instability? Join this EURACTIV Virtual Conference to discuss the possible impacts of excessive speculation on the functioning of the EU ETS market. What measures could be taken to mitigate the risk of excessive speculation, and more broadly to stabilise allowances prices and improve the EU ETS market functioning? Speakers include Jytte Guteland MEP and Fabrizio Planta from ESMA. Full programme and registration here. (Supported by PGE).
28 APRIL. Carbon removals – how best to implement and validate? Join this EURACTIV virtual event to debate the regulatory framework that would foster trust in carbon removals. Independent measurement and verification are essential to ensure that carbon removals have been properly conducted and that the carbon is effectively and permanently removed from the atmosphere. Speakers include Lukas Visek from the cabinet of EC vice-president Timmermans and Norbert Lins MEP. Programme and registration here. (Supported by TIC Council)
29 APRIL. Circularity of bottles: contributing to the Green Deal. Join this EURACTIV Virtual Conference to discuss what’s the best recipe for meeting circular economy and climate objectives and whether deposit return schemes are an efficient way to meet collection and recycling targets for EU natural mineral and spring water producers. Speakers include Martin Hojsík from the European Parliament’s environment committee and more. Programme and registration here. (Supported by Natural Mineral Waters Europe)
29 APRIL. Media Partnership: Initiatives for a sustainable industry in Brazil. This webinar will cover examples of sustainability in the Brazilian industry. ORGANISED BY: The Embassy of Brazil in Berlin and ApexBrasil. Programme and registration here.
10 MAY. Due diligence and sustainable sourcing: can a common approach for all sectors work? Join this EURACTIV Virtual Conference to discuss responsible sourcing and due diligence. How can companies best develop tools and standards that fit the upcoming European legislation? And how can the European Commission ensure there is a coherent approach for all actors involved? Speakers to be announced soon. (Supported by the Nickel Institute).
17 MAY. Sustainable and healthy buildings – reaching the goals of the EU Green Deal. Join this EURACTIV Virtual Conference to discuss how the revision of the Energy Performance of Buildings Directive (EPBD) can support a healthy indoor climate while accelerating a decrease of energy costs and decarbonising our buildings. Speakers to be announced soon. Programme and registration here. (Supported by Velux).
17 MAY. A revised EPBD – faster decarbonisation of the EU’s building stock? Join this EURACTIV Hybrid Conference to discuss what can be done to improve the existing regulatory framework to support an effective decarbonisation process in the building sector. Speakers to be announced soon. Programme and registration here. (Supported by EdEn – Equilibre des Energies).
18 MAY. European Commission to present RePowerEU plan to break away from Russian fossil fuels. Combines with new “international partnerships and energy package” consisting of:
- New strategy on international energy engagement
- Joint Communication on a partnership with the Gulf
25-27 MAY. G7 meeting of climate and energy ministers
7 JUNE. Joint Communication on international ocean governance
15 JUNE. 2022 Strategic Foresight Report
22 JUNE. Nature protection package: Revision of rules around sustainable use of pesticides and nature restoration targets.
27 JUNE. Energy Council.
28 JUNE. Environment Council.
5 JULY. New design requirements and consumer rights for electronics tbc
20 JULY. Circular Economy Package 2:
- Policy framework for bio-based, biodegradable and compostable plastics
- Review of the Packaging and packaging waste directive to reinforce the essential requirements for packaging and establish EU level packaging waste prevention measures and targets
- Review of the Urban Wastewater Treatment directive