Gas pipeline supplies to the EU states this winter from Russia have been reduced by 80 percent (compared to the last year); it was acknowledged by the European Commission. Transformed gas supply distribution has invoked unprecedented pressure on the global energy markets, with severe knock-on effects on Europe’s energy system. The EU institutions have introduced several urgently needed measures…
In May 2022, the Commission presented supplements to the REPowerEU program (which was approved in spring 2021) aimed to reduce Russian gas supplies by two-thirds by the end of the year; the program has been underpinned with an investment plan of up to € d 300 billion.
Presently, the REPowerEU program includes a set of different legislative and actions proposals – ten in total – on the energy-related issues; some have been adopted at a record speed).
Some examples of changes are already visible: e.g. massive and rapid uptake of heat pumps in Poland. Generally, the results of all these EU actions are to prepare the member states for the winter season. However, some of the Commission’s proposals are still under discussion, although they are essential for sufficient and safe energy preparedness in the states.
The Commission calls on the Council to adopt them swiftly: the member states have to be assisted in being prepared for this and the next winter of 2023-2024; and the work has to start already presently.
Ten different directions
= The first one is has been from the inception to “to enormously diversify from Russian fossil fuels, mainly gas supplies”, towards more reliable and trustworthy suppliers.
= The second direction was that of saving energy: the Commission has introduced the target to reduce gas demand by 15%. Latest data shows that the member states “are very well on track”, acknowledges Commission; as saving energy direction is positive and the states shall keep on saving energy.
= The third point is about boosting the roll-out of renewables: in 2022, the EU-27 has added almost 50 gigawatts of new capacity to the energy network – it is almost doubling the additional capacity of renewable energy, mostly from wind and solar. This direction is very important for the states and for the EU in two aspects: it is good for the planet’s environment, and it is good for the member states’ economy (i.e. renewables are home-grown) as they create good jobs and sufficient for the independence and security of supply.
= The fourth point is that, in this context of renewables, the Commission has proposed to speed up drastically the permitting process for renewables. It is known that many projects are basically ready to go if the permitting and allowances are there, so the whole process to be faster; thus, a proposal on speeding up the permitting process is in the member states for approval.
= The fifth direction is about an introduction of a minimum gas storage obligation; presently the storage capacities in the states are now filled by more than 90%, i.e. the EU has overshot the target, so that the states are well above the previous five-year average.
= The sixth point is about European solidarity: the Commission proposed default arrangements for the supply of gas among the EU member states. Although functioning “solidarity agreements” have not been reached among all states, the EU makes sure that in any energy emergency, it has to be ensured that gas is available where it is needed most.
=The seventh point is about setting a working EU-wide platform for joint purchasing of gas in order to increase negotiation leverage and get better prices. It is regarded unacceptable that different member states are outbidding each other on the global market and thus driving up the prices. Besides, it is important to join forces for the negotiation on a global level.
=The eighth direction deals with the improvement of the member states’ energy infrastructure. The EU has established presently several new already operational pipe interconnectors: so-called the Baltic Pipe, which is the interconnector between Poland and Lithuania; the interconnector between Bulgaria and Greece; and the gas interconnector between Poland and Slovakia.
=The ninth point is about creating a legal framework that enables the EU member states “to skim off” the windfall profits, i.e. the super profits of energy-producing companies, with an idea of using this money to support vulnerable households and the vulnerable businesses in a targeted manner.
= And finally, the tenth direction is to propose a “market correction mechanism”, also known as the price cap, to limit spikes in gas prices at TTF level.