Russian Finance Minister: We will look for new markets for Russian oil away from the West

Russian Finance Minister: We will look for new markets for Russian oil away from the West

The European Union faces a potential shortage of almost 30 billion cubic meters of natural gas in 2023 – but this gap can be closed and the risk of shortages averted through stronger efforts to improve energy efficiency, deploy renewable energy, install heat pumps, promote energy savings and increase The gas supply, says the IEA in a new report published today.

The report – How to avoid gas shortages in the EU in 2023 – sets out a series of practical actions that Europe can take to build on the impressive progress already made in 2022 in reducing dependence on Russian gas supplies and filling gas storage ahead of this winter. The report warns that 2023 may well Proving to be an even more severe test for Europe as Russian supplies could fall further, global liquefied natural gas (LNG) supplies will be tight – especially if Chinese LNG demand recovers – and the unseasonably mild temperatures seen. At the beginning of the European winter is not guaranteed to last.

IEA Director General Fatih Birol launched the report together with European Commission President Ursula von der Leyen at a press conference in Brussels today – ahead of the extraordinary meeting of EU energy ministers on 13 December and the European Council meeting on 15 December.

“We have been able to withstand Russia’s energy blackmail. With our REPowerEU plan to reduce the demand for Russian gas by two-thirds before the end of the year, with the mobilization of up to 300 billion euros of investments. The result of all this is that we are safe for this winter,” he said President of the European Commission Ursula von der Leyen. “So we turn our focus to preparing for 2023, and next winter. To that end, Europe needs to increase its efforts in several areas, from international exposure to the joint purchase of gas and increasing and accelerating renewable energy and reducing demand.”

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“The EU has made significant progress in reducing reliance on Russian natural gas supplies, but it is still not out of the danger zone,” he said. IEA CEO, Fatih Birol. “Many of the circumstances that allowed EU countries to fill their storage sites for this winter will certainly not be repeated in 2023. The IEA’s new analysis shows that a stronger push for energy efficiency, renewable energy, heat pumps and simple energy-saving measures is essential to avoid the risk of shortages and further brutal price spikes next year.”

As a result of the steps taken by European governments and businesses during 2022 in response to the energy crisis, as well as the destruction of demand caused by huge price spikes, the amount of gas in EU storage sites was well above the five-year average in early December, providing an important buffer ahead of winter. Consumer actions, increased non-Russian gas supplies and favorable weather also helped offset the decline in shipments to Russia in 2022.

Steps already taken by EU governments on energy efficiency, renewables and heat pumps should help reduce the size of the potential gap between gas supply and demand in 2023. A recovery in nuclear and hydro power output from decade-low levels in 2022 should also help narrow the gap. Even so, the EU’s potential gas supply-demand gap could reach 27 billion cubic meters in 2023, in a scenario where gas supplies from Russia drop to zero and China’s LNG imports recover to 2021 levels, according to the report.

This gap can be closed through additional actions on energy efficiency, renewable energy, heat pumps, energy saving and gas supply, according to the analysis of the report.

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In order to spur faster improvements in energy efficiency, the report recommends expanding existing programs and increasing support measures for home renovations and the adoption of efficient appliances and lighting. He also recommends using smarter technologies and encouraging the transition from gas to electricity in industry.

To speed up the granting of permits for renewable sources, the report suggests adding administrative resources and simplifying procedures. It also suggests more financial support for heat pumps and changes to tax laws that penalize electrification. It also calls for more and better campaigns to get consumers to reduce their energy consumption, and lists various programs from a wide range of countries that can be used as best practices.

On the supply side, the report says that while Europe’s options to import more natural gas are limited, there are a handful of countries with spare export capacity that could increase exports by capturing gas that is currently flaring. The report also details opportunities to increase the production of low-cost biogas.

Together, these measures offer a way to avoid price acceleration, factory closings, increased use of coal for electricity generation and intense international competition for LNG cargoes – in ways that are consistent with the EU’s climate goals.

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