Confronted with excessive vitality costs and the pressing want to interrupt away from Russian fossil fuels, the European Fee is doubling down on the roll-out of renewables and vitality effectivity measures.
The warfare in Ukraine has led to a monumental shift in EU local weather coverage. Inside weeks of the invasion, Europe introduced it will minimize its reliance on Russian fuel by two thirds earlier than the top of the yr.
Europe is reliant on Russia for 40% of its fuel, importing 155 billion cubic metres (bcm) yearly. On 8 March, the European Fee outlined its plan to handle this: REPowerEU.
The plan is twofold. First, the EU goals to extend vitality effectivity and the rollout of renewable vitality. However as a result of not all industries will be electrified and there’s nonetheless a excessive demand for fuel within the close to future, the second half appears to be like at diversifying Europe’s fuel provide.
Within the quick time period, this implies turning to different suppliers, notably liquified pure fuel (LNG) from the US and Qatar. In the long run, it means ramping up the manufacturing of renewable or low-carbon gases, like biomethane and “clear” hydrogen.
“It’s time we sort out our vulnerabilities and quickly turn out to be extra unbiased in our vitality decisions. Let’s sprint into renewable vitality at lightning velocity,” stated EU Inexperienced Deal chief Frans Timmermans.
“Renewables are an inexpensive, clear, and probably infinite supply of vitality and as a substitute of funding the fossil gasoline trade elsewhere, they create jobs right here. Putin’s warfare in Ukraine demonstrates the urgency of accelerating our clear vitality transition,” he added.
Vitality safety
In response to the European Fee, the EU has sufficient fuel to make it via this winter, even when Russia have been to modify off the faucet. The primary query now’s what to do forward of subsequent winter.
“The actual downside could be filling storage in spring and summer season, in preparation for winter 2022-2023,” stated Catherine MacGregor, the chief govt of Engie, the French vitality utility. “It might be very tough to seek out the mandatory volumes and it will be very exhausting within the occasion of a protracted battle in Ukraine.”
To be ready for subsequent winter, nations ought to begin filling their storage now, in accordance with the European Fee.
On Wednesday (23 March), the EU govt plans to desk a legislative proposal to make sure fuel storage in Europe is crammed not less than as much as 90% yearly forward of the winter season. The proposal would additionally take a look at equity between EU nations as totally different member states have totally different storage capacities.
Past storage, Europe additionally wants to seek out various suppliers to switch Russian fuel. The trade has already began shifting to this, with imports of LNG hitting historic highs in December and January.
In response to the European Fee, Europe might import 50 bcm extra per yr from suppliers like Qatar, the US, Egypt and West African nations. Diversifying the fuel delivered to the EU by way of pipelines from nations like Azerbaijan, Algeria and Norway might ship one other 10 bcm yearly.
The EU govt additionally desires to look past fossil fuel to renewable gases, like biomethane and inexperienced hydrogen. It began placing Europe heading in the right direction to extend manufacturing of renewable gases with legislative proposals tabled in July and December, however the warfare in Ukraine has made this extra pressing.
Beneath its REPowerEU plan, the European Fee desires to succeed in 35 bcm of biomethane manufacturing and 20 million tonnes of inexperienced hydrogen manufacturing and imports by 2030.
If it hit these goals, Europe would shed 3.5 bcm of Russian fuel by the top of 2022 and 43-68 bcm of Russian fuel by 2030, in accordance with the Fee’s estimates.
Nonetheless, this requires an enormous enhance in manufacturing. In the mean time, Europe produces round 17 bcm of biogas, round 3 bcm of which is biomethane – a better high quality fuel that may be injected straight into the grid.
In the meantime, over 90% of hydrogen is at the moment nonetheless produced from fossil fuels like pure fuel, and inexperienced hydrogen manufacturing volumes should not anticipated to turn out to be vital earlier than the 2030s.
Obstacles
The 35 bcm goal for biomethane is welcomed by the trade. Commerce affiliation Eurogas stated a goal will assist drive manufacturing by giving a sign of how a lot Europe desires and by when.
However one concern is how these goals could be supported by laws.
“All of the automobiles have left the storage – the renewable vitality directive is out, the fuel directive is out,” stated James Watson, the secretary-general of Eurogas.
“On this respect, the Fee should work out how they’re going to place these concepts within the communication into follow and it’s removed from clear to us how that can occur,” he instructed EURACTIV.
One other concern is that not all of the items of the puzzle are in place but. As an illustration, there’s confusion within the fuel package deal in relation to whether or not biogas is counted as renewable or not.
Alongside this, the trade should wait till 2024 for clarification on low-carbon gases, which the trade warns might imply delays in funding selections.
There are additionally issues that the gradual rollout of renewable vitality in Europe will show a stumbling block for renewable hydrogen, which depends on inexperienced vitality to energy the method.
“Renewable hydrogen very a lot is determined by the flexibility to have the rollout of renewable electrical energy and, subsequently, overcoming issues like allowing,” stated Watson.
“The build-up of renewables isn’t going anyplace close to quick sufficient even to fulfill the direct electrification goals that there are, not to mention to additionally present the inexperienced hydrogen,” he added.
This would go away Europe extra reliant on its worldwide companions for inexperienced hydrogen.
Nonetheless, there are additionally points round infrastructure for imports, which might impression the provision of each LNG and hydrogen. Each EU nation is now linked straight or not directly to an LNG terminal, however there are gaps within the system.
As an illustration, the Iberian Peninsula has a number of LNG import terminals, with Portugal in search of to place itself as Europe’s “new gateway for fuel” imported from locations just like the US and Qatar. Nonetheless, it’s minimize off from the remainder of Europe as a result of there is no such thing as a pipeline infrastructure connecting France to Spain. This “vital” connection ought to be prioritised, in accordance with the European Fee.
Environmental teams, for his or her half, warn in opposition to constructing new fuel infrastructure, saying LNG terminals and pipeline connections will take years to finish and received’t alleviate the quick stress on fuel provide.
By doing so, Europe dangers locking itself into a brand new fossil fuel habit, they warn, pointing to the environmental impression of fracked LNG coming from the US and poor human rights file of nations like Qatar and the United Arab Emirates (UAE).
Just like the European Fee, environmental teams additionally emphasise the necessity to electrify as a lot as attainable.
“Each renewable hydrogen and biomethane will play a restricted function within the vitality transition, and may play a restricted function within the quick time period,” Eilidh Robb from Pals of the Earth instructed EURACTIV.
“We have to ensure that hydrogen utilization is renewable and used primarily for sectors which can be exhausting to affect, and we should be reasonable in regards to the volumes of biomethane being proposed, notably given the already rising price of meals,” she added.
Renewables and vitality effectivity
Renewable vitality and vitality effectivity have additionally been thrown into the highlight as methods to lower Europe’s reliance on Russian fossil fuels.
The EU was already trying to enhance its renewable vitality capability and increase vitality effectivity to sort out the local weather disaster, with new targets tabled in July.
The necessity to break free from Russian fossil fuels has made these much more urgent. “Given the circumstances, the co-legislators may also need to contemplate….increased or earlier targets for renewable vitality and vitality effectivity,” the Fee says in its REPowerEU plan, one thing already underway within the European Parliament.
On renewable vitality, the European Fee desires to extend the rollout of solar energy and warmth pumps. In June, it plans to desk a communication on unlocking photo voltaic vitality’s potential as a significant renewable vitality supply and, in Could, it’s anticipated to publish a suggestion on quick allowing for renewables.
Beneath its ‘Match for 55’ package deal of local weather laws tabled in July, Europe’s photo voltaic and wind capacities would double by 2025 and triple by 2030, slicing annual fuel consumption by 170 bcm by the top of the last decade. Dashing up the rollout of rooftop photo voltaic might save an extra 2.5 bcm of fuel.
Impression on customers
For EU governments, excessive vitality costs and the impression on customers is a large concern. To assist alleviate this, many vitality corporations are beneficial to a Europe-wide cap on fuel costs to comprise volatility.
Electrical energy costs are pushed by “marginal” manufacturing capability out there from fuel energy vegetation whose price have surged since final summer season due to a provide squeeze from Russia and lack of storage.
“As a matter of urgency, I believe it’s actually vital that we check out capping wholesale fuel costs at European stage. That may make it attainable to comprise the volatility,” Engie’s MacGregor instructed a panel hosted by the French authorities on 9 March.
However Engie additionally warns in opposition to making drastic adjustments to Europe’s electrical energy market in an try to alleviate the value crunch.
“Individuals are one way or the other complicated the necessity for quick emergency measures as a way to management costs in case of fuel provide disruption – that is precisely what we’re saying concerning a cap on wholesale fuel costs – and the choice to enhance additional the European electrical energy market design, which is said to the demand, the out there technology and its marginal manufacturing price, typically linked to CO2 and fuel stage,” stated Guillaume Gillet, director of European Affairs at Engie.
“We’re very cautious with this latter facet as a result of that’s one thing that has been developed and dealing for 25 years,” he instructed EURACTIV.
Vitality corporations additionally warn in opposition to a drastic reassessment of the function of fuel within the vitality transition. As soon as envisaged as a transition gasoline for coal-reliant nations like Poland and Germany, the narrative round fossil fuel has modified dramatically because the outbreak of warfare in Ukraine.
Warsaw is now “how we are able to cut back our dependence on fuel throughout this transitional interval,” stated Polish local weather minister Adam Guibourgé-Czetwertyński throughout a gathering of atmosphere ministers on Thursday (17 March). “We’re going to should rethink the plans that we had cast previously,” he admitted.
Europe’s largest fuel shopper, Germany, can also be reconsidering fuel as a transition gasoline. “Putin has damaged the narrative of pure fuel as a bridging know-how, the bridge has collapsed,” stated Patrick Graichen, state-secretary on the German ministry for financial affairs and local weather motion.
For environmental teams too, the warfare in Ukraine has proven Europe’s overdependence on fossil fuels. In response to Robb, Europe now wants a critical plan to section out fuel, alongside measures to guard susceptible customers, like a ban on disconnections.
Nonetheless, within the eyes of trade teams like Eurogas, fossil fuel nonetheless has a job within the vitality transition, even when it’s a shorter bridge in direction of renewables.
Fuel will nonetheless be wanted, notably for low-carbon hydrogen manufacturing, Watson instructed EURACTIV, pointing to nations like Norway, which nonetheless have massive reserves of fossil fuel and are creating carbon seize know-how to sort out the associated emissions.
“There’s, in fact, the dialogue of lowering dependency on Russia, however on the identical time, we shouldn’t lose the innovation that we might want to meet our local weather goals,” stated Watson.
[Edited by Frédéric Simon]