The European Commission on 9 March proposed the outline of a plan, designated REPowerEU, to make Europe independent from Russian fossil fuels well before 2030, starting with gas. The plan also outlines a series of measures to respond to rising energy prices in Europe and to replenish gas stocks for next winter. Europe has been facing increased energy prices for several months, but now uncertainty of supply is exacerbating the problem. REPowerEU will seek to diversify gas supplies, speed up the roll-out of renewable gases and replace gas in heating and power generation. This could reduce EU demand for Russian gas by two thirds before the end of the year.
Commission president Ursula von der Leyen said: “We simply cannot rely on a supplier who explicitly threatens us. The quicker we switch to renewables and hydrogen, combined with more energy efficiency, the quicker we will be truly independent and master our energy system. I will be discussing the Commission's ideas with European leaders at Versailles later this week.”
Executive VP for the European Green Deal, Frans Timmermans, said: “Let's dash into renewable energy at lightning speed. Renewables are a cheap, clean, and potentially endless source of energy and instead of funding the fossil fuel industry elsewhere, they create jobs here.”
Commissioner for Energy, Kadri Simson, said: “Russia's invasion of Ukraine has … driven energy prices to unprecedented levels. For the remaining weeks of this winter, Europe has sufficient amounts of gas, but we need to replenish our reserves urgently for next year. The Commission will therefore propose that by 1 October, gas storage in the EU has to be filled up to at least 90%. We have also outlined price regulation, state aid and tax measures to protect European households and businesses against the impact of the exceptionally high prices.”
Emergency measures on prices and storage
The Commission's ‘Energy Prices Toolbox' from last October has helped Member States to mitigate the impact of high prices on vulnerable consumers and it remains an important framework for national measures.
The Commission is now presenting Member States with additional guidance, including the regulation of prices when necessary, the redistribution of revenue from high energy sector profits and emissions trading to consumers, and the use of state aid to provide short-term support to companies affected by high energy prices, perhaps under a new State aid Temporary Crisis Framework.
The Commission intends to present by April a legislative proposal requiring underground gas storage across the EU to be filled up to at least 90% of its capacity by 1 October each year. It will continue to investigate the gas market in response to concerns about potential distortions of competition by operators, notably Gazprom.
To address skyrocketing energy prices, the Commission will look at emergency measures to limit the effect of gas prices on electricity prices, such as temporary price limits.
REPowerEU plan aims to speed up the exit from Russian gas with two primary measures: diversifying gas supplies, via increased LNG and pipeline imports from non-Russian suppliers, and generating or importing larger volumes of biomethane and renewable hydrogen; and reducing faster the use of fossil fuels in homes, buildings, industry, and the power system by boosting energy efficiency, increasing renewables and electrification, and addressing infrastructure bottlenecks.
The Commission believes that full implementation of its existing ‘Fit for 55' proposals would reduce annual fossil gas consumption by 30%, ie 100 billion cubic metres, by 2030. With the REPowerEU plan, this could be increased to 155 bcm, equivalent to imports from Russia in 2021. Almost two thirds of that reduction can be achieved within a year.