How the EU plans to cut natural gas consumption by 15%
Last week, European Union ministers agreed to major gas cuts across Europe amid concerns of gas shortages as winter approaches. So what are countries around the world doing to reduce their energy consumption in the face of shortages and rising prices? Several governments are now introducing measures to ensure they maintain their energy security as the flow of Russian gas begins to slow. Last week, the European Commission proposed a 15% reduction in gas consumption in member states, starting in August and ending in March 2023, to ease concerns about energy insecurity during the winter months. ‘winter. Although this is a year less than previously recommended. However, Spain, Portugal, Greece and Denmark have all opposed mandatory cuts, with Spain stressing its energy self-sufficiency. Some member states have opposed the gas cuts, pointing out that some European countries have come to depend much more on Russian gas than others, making the restrictions unfair.
Ministers agreed on a lighter version of the proposal with voluntary reductions, in which not all member states have to reduce their gas consumption by the same amount. The agreement on the voluntary cuts was reached by member states as EU governments see a complete cut off of Russian gas as increasingly likely. Cuts become mandatory in the event of an energy emergency.
Kadri Simson, European Commissioner for Energy, explained how this decision can help countries in the region protect their economies. He said: “The impact on GDP will be significantly less if we start saving now and don’t wait for Russia to force us to do so. However, estimates suggest that the Russian gas cut could cause EU GDP to fall by around 1.5% if the winter is cold and member states do not take early preventive measures to save energy. .
Russian oil imports are already down, with flows from the Nord Stream 1 pipeline expected to fall to around 20% of capacity this week. This is likely to hamper EU hopes of filling its gas storage to 80% before the cut. But some countries have already presented their energy saving plans over the next few months to ensure their adherence to the scheme and plan for greater energy security.
In France, shops risk fines if they do not close their doors when using air conditioning. Illuminated commercial signs must be extinguished once the business is closed and illuminated advertising must be extinguished in the early hours of the morning. In Germany, the spotlights of public monuments will be turned off, as well as the fountains. In addition, public swimming pools and sports facilities must switch to cold water for showers. Municipal buildings will also reduce the use of air conditioning and heating equipment throughout the year.
While in Greece, the government is strongly pushing people to change their habits with “thermostat operation” requiring the air conditioning to be set at 27°C minimum in summer. In addition, computers have to be switched off after office hours and huge investments, around 640 million euros, are planned to install windows, more efficient heating and cooling systems in public buildings. And in Ireland, people are being asked to reduce their driving speed to save fuel, as well as reducing their overall energy consumption.
Italy is also considering turning off the lights of its monuments and is ready to go much further by closing all commercial businesses after 7 p.m. in the face of the energy emergency. Finally, in Spain, the government reminded the rest of the EU that it does not depend on Russian gas and is largely self-sufficient. However, he accepted a 7-8% reduction in gas consumption by encouraging people to use energy at home more responsibly.
Yet in the UK, the government is drawing up relief plans to avoid shortages without massively changing public behavior. The National Grid has asked coal-fired power stations to be on standby during the winter months to fill the energy gap created by gas shortages if needed. In this case, the power plants would be paid more to produce additional electricity, while consumers would be incentivized to consume less. EDF and Drax have agreed to keep their coal-fired power stations ready to supply electricity if needed. Plans can also be made to pay industrial users to reduce their energy consumption.
With the UK less dependent on Russian gas than some other European countries, the government does not expect serious shortages. But consumer prices are set to rise significantly, with household energy bills hitting £3,850 in 2023. Also, it could have a knock-on effect on Britain’s climate pledges, having planned to close more of coal-fired power plants before the complete end of the industry in 2024.
While some countries in Europe are ready to drastically reduce their gas consumption, others less dependent on Russian energy are reluctant to do so. However, most countries in the region are likely to join forces in coherent action to reduce the impact of the inevitable decline in Russian energy imports to the rest of Europe in order to reduce the negative economic impact on the whole region.
By Felicity Bradstock for Oilprice.com