EU plots strategy to reduce imported gas dependence

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The European Commission has announced a new energy security strategy for the European Union in response to the current geopolitical environment and the region’s heavy import dependence. Key elements of the strategy include diversifying external energy supplies, upgrading energy infrastructure, completing the EU internal energy market and saving energy.

Following Russia’s annexation of Crimea in February and the ongoing crisis with Ukraine, it was at the European Council last March that the commission agreed to conduct an in-depth study on energy security and formulate a strategy to reduce EU energy dependence. Not surprisingly, the strategy places a strong emphasis on gas supply security, given the current crisis over Ukraine and consequent uncertainty over Russian gas exports to Europe, and previous Russia/Ukraine gas crises, such as the one in 2009.

The proposals – which include actions to ensure uninterrupted supplies this coming winter – will be discussed by EU heads of state or government at the European Council meeting towards the end of this month.

Still vulnerable: Launching the proposals in Brussels on 28th May, the commission’s president, José Manuel Barroso, said: "The EU has done a lot in the aftermath of the gas crisis in 2009 to increase its energy security. Yet, it remains vulnerable. The tensions over Ukraine again drove home this message. “In the light of an overall energy import dependency of more than 50% we have to make further steps . . . On energy security, Europe must speak and act as one." Energy commissioner Günther Oettinger added:

"We want strong and stable partnerships with important suppliers, but must avoid falling victim to political and commercial blackmail . . . “Collectively, we need to reinforce our solidarity with more vulnerable member states. We also need to complete the internal energy market, improve our infrastructure, become more energy efficient and better exploit our own energy resources. Moreover, we need to accelerate the diversification of external energy suppliers, especially for gas."

Gas stress tests: To ensure uninterrupted supplies this winter, the commission proposes comprehensive risk assessments, or stress tests, to be conducted at the regional or EU level by simulating a disruption of the gas supply. The aim would be to check how the energy system copes with security of supply risks and to use this information to develop emergency plans and back-up mechanisms. “Such mechanisms,” says the commission, “could include: increasing gas stocks; decreasing gas demand via fuel-switching, in particular for heating; developing emergency infrastructure like, for example, completing reverse flow possibilities; and pooling parts of the existing energy security stocks.”

A €1 billion/day energy bill: EU domestic energy production decreased by almost one-fifth between 1995 and 2012. Today, more than 50% of the EU's energy needs are covered by external suppliers: in 2012 almost 90% of oil, 66% of gas and 42% of solid fuels consumed in the EU were imported, at a cost of more than €1 billion/day. To address medium- and long-term security of supply challenges, the commission proposes actions in several areas:

  • Completing the internal energy market and building missing infrastructure links to enable a fast response to possible supply disruptions by directing energy flows across the EU as and where needed. The commission has identified 33 critical infrastructure projects.
  • Diversifying supplier countries and routes. In 2013, 39% of EU gas imports came from Russia, 33% from Norway and 22% from North Africa, meaning Algeria and Libya. “While the EU will maintain its relationship with reliable partners,” said the commission, “it will seek ties to new partner countries and supply routes – for example in the Caspian Basin region by further expanding the Southern Gas Corridor, by developing the Mediterranean Gas Hub, and by increasing LNG supplies.”
  • Strengthening emergency and solidarity mechanisms and protecting critical infrastructure. For example, the commission intends to review the Security of Gas Supply Regulation.
  •  Increasing indigenous energy production. “This,” said the commission, “includes further deployment of renewables, and sustainable production of fossil fuels.”
  •  Improving coordination of national energy policies and speaking with one voice in external energy policy. “The commission aims to be involved at an early stage in envisaged intergovernmental agreements with third countries that could have a possible impact on security of supply,” it said. “Moreover, the commission will ensure that all such agreements and all infrastructure projects on EU territory fully comply with the relevant EU legislation.”
  •  Further developing energy technologies.
  •  Increasing energy efficiency. “As buildings are responsible for 40% of our energy consumption and a third of natural gas use,” said the commission, “this sector plays a crucial role.”