EU and Russia: Gas Dependency and How to Reduce It

First things first – it’s the 10th day of war in Ukraine. Over 8 years since Russia first invaded their independent neighbours. Thousands of unnecessary casualties from both sides, including Ukrainian civilians, women and kids. Social media is full of horrifying videos and pictures. At the same time, free media channels are also full of inspiring and patriotic Ukrainians defending their country with pride. On the other side, the Russian territory, however, those same channel are either fully switched off or suspended. The only source of information is now state controlled TV and Radio. Pouring ever increasing propaganda into people’s minds of all ages, from school kids to elders.

That’s what’s causing the reshuffling of my content plan for the month of March. It’s hard to focus on anything but the situation in Ukraine, a country so so similar to my own home, Lithuania. I’m relating to what’s going on in Eastern Europe at a highly personal level and it only feels right to continue joining the protests in London, donate and spread awareness. Nevertheless, I’m not going to expand about the war crimes committed by Russia in this article any further. Instead, we will look at how European Union can rapidly reduce its dependency on Russian gas, what IEA (International Energy Agency) is recommending and why this will accelerate Europe’s transition to green, renewable energy even more.

Europe’s reliance on imported natural gas from Russia has again been thrown into sharp relief by Russia’s invasion of Ukraine on 24 February. In 2021, the European Union imported an average of over 380 million cubic metres (mcm) per day of gas by pipeline from Russia, or around 140 billion cubic metres (bcm) for the year as a whole. As well as that, around 15 bcm was delivered in the form of liquefied natural gas (LNG). The total 155 bcm imported from Russia accounted for around 45% of the EU’s gas imports in 2021 and almost 40% of its total gas consumption.

‘We cannot solve our problems with the same thinking we used when we created them’ said Albert Einstein. Yet, The European Commission in its latest strategy meeting for more affordable, secure and sustainable energy appears to be doing just that. The Commission rightly identifies the energy price crisis as rooted in the EU’s exposure to global and volatile gas prices. It also points to energy efficiency and renewable energy investments as the ‘best answer for the future’. However, the strategy then proceeds to more of the same cure: fossil gas imports, this time from different countries such as Azerbaijan, Qatar and Turkey, instead of Russia. This approach is at odds with the Commission’s own projections showing that by 2030 fossil gas use must decline by 30% compared to 2015. To bet on short-term gas contracts in a global commodity market is a risky undertaking, as the current geopolitical situation painfully demonstrates.

The solution? Budget reallocation.

The EU’s fossil import bill increased by 70% between December 2020 and December 2021, currently reaching around €380 billion. This amount happens to be as high as the additional clean energy investment needs estimated by the European Commission in its Impact Assessment underpinning the higher 2030 targets. On one hand, it would go to investments on energy efficiency, renewables and electrification and the jobs that come with them. On the other, the money is lost on buying fossil fuels and in today’s circumstances, supporting war and criminal that Putin is. This comparison reveals that the current energy and cost of living crisis is as much a fossil gas demand crisis as it is a supply one. Therefore, EU should move beyond the current strategy of replacing gas with more gas from other countries and instead start from the demand side. 

Map of key natural gas and oil pipelines in Europe

Most of Europe’s gas right now is used for low-temperature heating, which can be replaced with existing technologies rather quickly and easily. The Commission’s Energy System Integration Strategy of 2021 rightly identified energy use reduction and electrification of home heating as key levers. These findings were backed up by recent reports from the International Energy Agency and McKinsey. This building heating transition is expected to reduce gas consumption in buildings by more than 40% compared to 2015 levels and contribute nearly two-thirds of the overall reduction in gas consumption over the same period. The old energy and gas recipes cannot make supply more secure, more affordable or cleaner. Progress towards net zero ambitions in Europe will bring down gas use and imports over time, but today’s crisis raises specific questions about imports from Russia and what policy makers and consumers can do to lower them. The latest IEA analysis proposes a series of immediate actions that could be taken to reduce reliance on Russian gas, while enhancing the near-term resilience of the EU gas network and minimising the hardships for vulnerable consumers.

Other avenues are available to the EU if it wishes or needs to reduce reliance on Russian gas even more quickly – but with notable trade-offs. The main near-term option would involve switching away from gas use in the power sector via an increased call on Europe’s coal-fired fleet or by using alternative fuels – primarily liquid fuels – within existing gas-fired power plants. Given that these alternatives to gas use would raise the EU’s emissions, they are not included in the 10-Point Plan described above. However, they could displace large volumes of gas relatively quickly. We estimate that a temporary shift from gas to coal- or oil-fired generation could reduce gas demand for power by some 28 bcm before there was an overall increase in the EU’s energy-related emissions. 

The larger share of this potential decrease in gas demand would be possible through gas-to-coal switching: an additional 120 TWh in coal-fired generation could cut gas demand by 22 bcm in one year. In addition to opportunities to run on biomethane, nearly a quarter of the EU’s fleet of gas-fired power plants is capable of using alternative fuels – nearly all in the form of liquid fuels. If this fuel-switching option were to be fully exercised in addition to the complete implementation of the 10-Point Plan described above, it would result in a total annual reduction in EU imports of gas from Russia of more than 80 bcm, or well over half, while still resulting in a modest decline in overall emissions.

The European Union’s dependency on Russian gas is bluntly obvious. However, it can be reduced instantly and efficiently. The bandaid could also be ripped off by sacrificing EU’s immediate emission reduction goals in exchange for a crucial hit to Russia’s war chest and Putin’s own pockets. Either way, the transition is already happening and the aggression from the East will further accelerate it. The only question left to answer here for our elected politicians is how quickly are we willing to cut the ties?

Cлава Україні!

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