Brussels launches its grand plan to disconnect from Russian energy | International

The European Commission has launched this Wednesday an ambitious plan to close Russia’s energy tap in the shortest possible time. Driven by the urgency of a war whose consequences for security of supply and price volatility are unpredictable, the initiative is vast, global, and aims to solve problems in various corners of the continent. The proposal has many legs that go from the “massive” increase in investments in renewable energy (such as solar panels, one of the great bets of Brussels) to extraordinary measures to deal with the runaway rise in the electricity bill. There will be joint purchases of gas in international markets and financing of up to 2,000 million euros in oil infrastructures that will allow the veto to the embargo of this hydrocarbon that some countries (such as Hungary) continue to propose and that has become the great problem of head of the Twenty-seven these past few weeks.

The Community Executive also opens the door to the imposition of a regulated price at the community level for gas imports in the event of a scenario of total disruption of the flow from Russia, a hypothesis whose shadow terrifies Brussels, and which could lead to the need to implement national emergency plans, coordinated from Brussels, and ultimately to a rationing of supplies in the community bloc.

The Commission also agrees to study that other EU countries, such as Italy, may request to benefit from the so-called “Iberian exception”, the mechanism that has allowed two countries with little interconnection with the community electricity market (Spain and Portugal) to limit extraordinary way the price of gas.

“Putin’s war is seriously disturbing the world energy market,” the president of the European Commission, Ursula von der Leyen, assured this Wednesday during an appearance. “It shows how dependent we are on imported fossil fuels. But also how vulnerable we are by relying on Russia to import our fossil fuels. That is why we must reduce our energy dependency on Russia as quickly as possible.”

The idea, moreover, is to stop financing Vladimir Putin’s regime, to which the EU pays around 100 billion euros annually for imports of Russian fossil fuels from Russia, according to Brussels calculations.

A green transition

The head of the Executive branch of the EU has indicated that the Twenty-seven are already on the right track: Russian gas imports have been reduced from 40% in 2021 to 26% in April this year. In addition, she has explained that the Commission’s proposal gravitates on one of the most ambitious plans of her mandate, the so-called European green pact. Von der Leyen has assured that the initiative launched this Wednesday raises this proposal “to another level”.

The call REpower UK It is based on several formulas: saving energy and reducing consumption, accelerating the disconnection from fossil fuels, the search for new energy suppliers and “massive” investments to fuel this transition, which includes green hydrogen projects , called to be one of the great energy resources to replace gas by the year 2030. The implementation of the plan that the Commission has launched this Wednesday would require an additional investment of 210,000 million euros.

Brussels intends to connect this financing with the multimillion-dollar recovery funds approved in 2020 to alleviate the blow of the pandemic in the European economies, which already allocated just over a third of their investments to the green transition. For this, it intends to mobilize around 300,000 million euros (about 72,000 million in subsidies and 225,000 million in loans). This figure includes financing for specific projects to overcome in the immediate term the bottlenecks in the infrastructure for the supply of gas and liquefied natural gas from new sources “so that no Member State is left out in the cold”, in the words of Von der They read.

supply rationing

The Brussels initiative also delves into one of the most thorny issues in the community capital: what to do if the accounts do not come out, that is, if the 155,000 million cubic meters of Russian gas that are currently imported cannot be replaced in the face of an eventual brutal disconnection decreed by Moscow.

The Commission’s calculations indicate that two-thirds of this volume can be replaced by increasing supplies from other suppliers (such as the United States, Azerbaijan, Norway or Qatar), voluntary measures to reduce consumption and the rapid implementation of renewables and more efficient technologies (such as heat pumps to heat homes). But in case Russia closes the handle completely, as the giant Gazprom has already decreed with Bulgaria and Poland for refusing to pay the bill in rubles, there would still be a third of the demand to cover.

Faced with a total disruption, especially given the risk that it will happen in the face of next winter, Brussels could use the security of supply regulation, in force since 2017, to impose measures that guarantee the arrival of sufficient gas to protected customers ( homes and essential social services) of all countries and that mitigate the economic and social consequences of a possible emergency.

Each affected country can declare the level of emergency at the national level and introduce its own rationing rules. In addition, countries with supply problems will be able to invoke the solidarity clause provided for in the community regulation, which would force their neighbors to meet their demand. The Commission would be in charge of declaring a regional emergency (if it affects several countries) or a community-wide emergency if the supply crisis is widespread.

“The current legal framework of the EU already provides that, in the event of an extreme crisis, Member States may request solidarity measures from their neighboring Member States,” describes the Commission’s communication. These solidarity mechanisms, he adds, are “the last resort in case of extreme gas shortages to guarantee the supply to homes, district heating systems and basic social facilities in the affected country.”

The Commission has undertaken to develop “prioritization criteria for unprotected customers, particularly in the industry.” These guidelines will focus “on the identification of key and critical national and cross-border value chains which, if disrupted, could have a negative impact on food, health and safety at European and global level”, it adds. the text. The idea is to guarantee the supply of protected customers and industries, to minimize the impact of possible interruptions.

“In case of total disruption”, a high-ranking source from the Community Executive abounds, entering an abyss unthinkable just a few months ago, “we would also study how to coordinate, with a community approach, the cut in demand that might be necessary”.

The idea is not to have to go to the extreme. But in any case, the transition to an economy without Russian hydrocarbons will be “fucking hard”, to use the famous expression (“bloody hard”) of the European commissioner Frans Timmermans, executive vice president in charge of the European green pact, and who this Wednesday repeated high sources of the Community Executive to account for the next steps. The Commission even foresees that in the next five or ten years the use of coal and nuclear energy for electricity production will “temporarily” increase, while at the same time the renewable electricity targets are raised (from 40% forecast for 2030 to 45%).

“The European way of life also consists of adapting to new challenges”, Timmermans stressed this Wednesday during a press appearance, when questioned about the daily implications for citizens of the Commission’s new plan. “We remain curious, innovative, improvise and invent”, he has insisted. “That is the European way of life.”

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