Source: Energy & Management Powernews , December 13 2022
According to a study by the International Energy Agency (IEA), the EU needs to find another 30 billion cubic meters of gas to make ends meet safely next winter.
IEA chief Fatih Birol said at a press conference with EU Commission President Ursula von der Leyen (CDU) in Brussels that Russia is expected to completely stop its deliveries to the EU next year, with little additional liquefied natural gas (LNG) capacity coming onto the market. Investments in LNG infrastructure are declining, he said.
Furthermore, it must be assumed that the People's Republic of China will again demand more liquefied natural gas in 2023. Finally, 2022 had been particularly mild weather, he said, so higher consumption should be expected next year due to weather conditions. "The crisis is not over," the IEA chief said, "2023 could be more difficult than this year."
In Birol's view, the EU has clearly broken away from Russian gas. However, he added, it is "not out of the danger zone yet." It could close the looming supply gap of around 30 billion cubic meters if it increased its energy efficiency more quickly. Here, it is above all a matter of accelerating building renovation.
The Union could also make further gains in the expansion of renewable energies if planning and approval procedures were streamlined. There is a "long pipeline of projects" waiting for rapid implementation,
What 1 degree less brings
As another measure, the IEA chief recommends greater investment in heat pumps and lowering the room temperature in homes and offices. 1 degree less would bring a saving of 10 billion cubic meters of natural gas,
The Europeans could also help producing countries such as Algeria to flare less gas, thus securing additional supplies. Birol put the additional investment needed at 100 billion euros in a year. But this money would be saved again in just two years through lower gas consumption.
The Commission president pointed to ten measures that the EU had already implemented or was in the process of adopting.
- So it had succeeded in finding new suppliers for gas and becoming less dependent on Russian gas.
- The member states had also succeeded in saving the targeted 15 percent gas, and the gas storage facilities were better filled than targeted.
- For emergencies, solidarity measures have been agreed between member states,
- Four new gas interconnectors have come online this year: between Poland and Lithuania, Poland and Slovakia, Bulgaria and Greece, as well as the Baltic Pipeline connecting Poland and Denmark with Norway,
"This winter we are safe"
But greater efforts are needed next year, he said. The Commission has established the platform for joint gas purchases, von der Leyen continued. It is becoming increasingly popular, she said. The commission said more and more suppliers and traders in the EU, as well as suppliers from the U.S. and Norway, were interested in contracts brokered through the platform.
Because of new, Community regulations, member states would be able to skim "excessive" profits from electricity suppliers, and support needy consumers.
Von der Leyen urges gas price cap
The Commission president called on energy ministers to adopt the proposed price cap as soon as possible. She said the EU must buy at least as much liquefied natural gas on the world market next year as it will this year, or 130 billion cubic meters. To this end, he said, cooperation with the EU's partners would be expanded. But cooperation among EU states must also be intensified, he said: "Joint gas purchases must become a reality!" The Commission could organize the first tenders for joint purchases in March if the Council of Energy Ministers adopts the proposals for this now. The ministers have already agreed on this.
Politically, however, the formation of purchasing cartels is linked to the price cap on gas imports demanded by 15 member states. Energy ministers will negotiate on this at a special meeting on Dec. 13. A maximum price for gas, the IEA chief said, could protect consumers if it is properly designed and the price level is chosen appropriately.
A priority for the expansion of renewable energies also depends on an agreement on the price cap. A proposal to speed up approval procedures for wind turbines and solar plants is also on the negotiating table of the Council of Ministers. This would allow the EU to double the expansion of renewables in 2023, von der Leyen said.
But the EU also needs "more public investment in the energy transition, at European and national level." This is primarily about its competitiveness and a response to the U.S. climate program IRA, she added. As part of the 2024 financial planning review, he said, the Commission was considering the creation of a "sovereignty fund," for which additional funds would be needed (see also separate reports on savings efforts by German gas budgets and on European PV module production).
The Study "How to Avoid Gas Shortages in the European Union in 2023" by the IEA outlines concrete measures to close potential natural gas supply gaps in the EU. The English-language study is available for download on the Internet.
Author: Tom Weingärtner
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