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Specific EU-wide program called REPowerEU is aimed at assisting the member states in three main developmental directions: a) saving energy, b) clean energy production and use, and c) diversifying the states’ energy supplies coped with a wide use of renewables. The program’s implementation helps, e.g. to safeguarded the households in EU and businesses from energy shortages, reduce external dependency on fossil fuels and accelerate “green transition”.
Background
In response to Russia’s invasion in Ukraine, the European Commission proposed the REPowerEU Plan in March 2022, with the main idea of terminating the European age-old dependency on Russian fossil fuels.
The leaders of all the EU states agreed on the need for a detailed plan, which the Commission finally presented in May 2022. Several emergency legislative measures in the energy field followed during the course of 2022; they have been implemented by the EU institutions and the member states (including citizens, businesses and industry) as well as the EU reliable international partners.
Thus, already during 2021-23, the share of Europe’s Russian gas imports fell from 45% in 2021 to 24% in 2022, and further to 15% in 2023; this downward trend continue still to about 10 percent.
Besides, the EU member states have reduced their gas demand by almost 20 percent, which has allowed saving more than 107 bcm of gas during last 18-months.
The increased share of renewables in the energy mix has allowed the EU-27 to replace the equivalent of 24 bcm of Russian gas in 2022 and 2023; harmful emissions from the power sector fell by an impressive 24 percent during 2023, while the EU economy continued to grow.
Gas storage in the EU
Among the “most secure” measures proposed by the Commission was a target for the member states to fill gas storages to 90 percent capacity by the beginning of November every year. With EU gas storages more than 58 percent full on the first of April, the EU has now entered the injection season with the highest storage level on record.
European energy operators have also stored 2 billion cubic meters, bcm of gas in Ukrainian storage, providing extra security for Europe, and supporting the EU neighbour partners. This high level of gas storage puts the EU well on track to meet the desired 90 percent target on the first of November 2024, and to enter winter 2024/2025 well prepared.
This energy policy would also ease the pressure on gas prices in the member states during the storage filling season.
Financing the RepowerEU program
The REPowerEU plan has required massive investments and reforms; with this in mind, the Commission has mobilized about €300 billion: i.e. approximately €72 billion will be in grants and approximately €225 billion in loans.
In the background of the “repowering planning” is the so-called Recovery and Resilience Facility (RRF), with the corresponding national recovery-resilient programs.
The whole political arrangement in energy strategy will include about €10 billion in “missing links for gas and LNG”, so that not a single EU member state would be “left in the cold”; besides, up to €2 billion for oil infrastructure would finally put an end to the shipment of Russian oil.
The rest of the RepowerEU program’s financing – about 95% of it – will go into speeding up and scaling up the clean energy transition.
General reference on RepowerEU program in: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en
European energy mix
The share of renewable energy has continued to increase during the crisis period, in line with REPowerEU objectives. New installed renewables capacity in 2022 and 2023 replaced the equivalent of 24 bcm of Russian gas with European renewable electricity.
Thanks to this increase in the share of renewables capacity and the recovery of nuclear and hydro generation, the EU’s CO2 emissions linked to the power sector are down by 24 percent in 2023 compared to 2022.
Diversification in energy supplies proceed along the following directions: a) establishing agreements with the third countries for pipeline imports; b) investing in common purchase of Liquefied Natural Gas, LNG; c) securing strategic partnerships with Namibia, Egypt and Kazakhstan to ensure a secure and sustainable supply of renewable hydrogen; and d) concluding agreements with Egypt and Israel for the export of natural gas to the EU.
Source: https://commission.europa.eu/strategy-and-policy/priorities-2019-2024/european-green-deal/repowereu-affordable-secure-and-sustainable-energy-europe_en
On the demand side, in line with the coordinated gas demand reduction agreed by the Council in August 2022, the EU reduced demand by 18 percent between August 2022 and January 2024 compared to the average between April 2017 and March 2022.
This corresponds to savings of more than 65 bcm of gas in 2023 alone (and 107 bcm in total over the 18-month period). On 25 March 2024, the Council formally adopted a recommendation to Member States to continue reducing their gas consumption by at least 15% until 31 March 2025. According to the Commission, “this should be done in a way that protects EU industry so that it can benefit from lower gas and power prices to strengthen European competitiveness”.
Natural gas supply
Natural gas imports to the EU during 2021-24 (including pipeline and LNG) are seen in the following way:
= For example, Norway increased supplies from 24 percent to 30 percent, while Russian gas reduced from 45 percent to about 10 percent;
= The US increased supplies to Europe from 6 percent to about 20 percent;
= North Africa has been during that time almost at the same level of 12-14 percent;
= Qatar has occupied a stable position of about 4 percent during these years.
After peaking at over 300 EUR/MWh at the height of Russia’s energy supplies in August 2022, gas prices are down to pre-war levels and have been consistently below 30 EUR/MWh since January 2024.
General reference: https://ec.europa.eu/commission/presscorner/detail/en/statement_24_1868
Main documents for additional information: = Communication (18 May 2022) on Key documents in REPowerEU; = Communications related to REPowerEU (3 October 2022), and the REPowerEU related documents in “Clear and complete repository of the thematic areas that are shaping the REPowerEU initiative”.