Europe’s ‘Energy Dependence Day’ is getting earlier each year


EXCLUSIVE / The day on which Europe runs out of indigenous energy and has to rely on foreign fuel imports is arriving earlier each year, according to an analysis by the European Alliance for Energy Efficiency in Buildings (EuroAce), which will be presented to the Energy Council in Athens today (16 May).

Fossil fuel imports leapt from 43% of Europe’s energy use in 1995 to 54% in 2011, largely due to increased demand from buildings at a time when domestic energy production had been falling fast.

The corresponding dates on which Europe ran out of home-grown energy surged forward from 26 July in 1995 to 18 June in 2011, a loss of 38 days’ energy independence.  

But a target of improving energy efficiency by 40% would push back ‘Dependence Day’ until 26 October – and cut energy imports by 80% – EuroAce’s director, Adrian Joyce will tell EU energy ministers this morning.

“Such a reduction in energy imports would (at 2012 prices) release up to €335 billion net into the EU economy per year in unspent revenue on energy imports and that money could be diverted to financing energy efficiency measures in the EU,” says Joyce’s speech, which EURACTIV has seen.

These figures are based on a landmark report by the Fraunhofer Institute published last October, which showed that the 40% efficiency target would slash greenhouse gas emissions by more than 50% and increase the share of renewables in Europe’s energy mix to 35%.

Interest in a binding 2030 energy savings target has been revived by fears that spiralling tension in Ukraine could end in Russia turning off the tap on the third of Europe’s gas supplies that it currently exports.

Some 70% of Russia’s gas exports currently go to Europe, and using the gas weapon would be costly for Moscow too.  But press reports suggest that Russia will next week sign a $50 billion pipeline construction deal with China to begin transporting 38 billion cubic metres of gas to Beijing every year from 2018.

Letter from Putin

In a letter to EU states that import Russian gas via Ukraine yesterday (15 May), Russia’s President Putin ratcheted up pressure with an announcement that an “advanced invoice” had been sent to Ukraine for non-payment of gas deliveries.  

“After June 1, gas deliveries will be limited to the amount prepaid by the Ukrainian company,” says the letter, Putin’s second on the subject, which was dispatched shortly before the Energy Council began its discussions on energy security.

Ukraine’s gas debt to Russia has grown from $2.37 billion to $3.5 billion in the last month, according to Gazprom and Putin’s missive calls for the Commission to “more actively engage” in dialogue to resolve the dispute.

Gas deliveries to EU states via Ukraine have been prepaid until the end of 2014, and so Kiev is contractually obliged to keep the gas pipelines flowing.

But Ukraine could illegally divert gas destined for the EU, to compensate for any staunched by Gazprom, and a new sense of urgency around the energy dependence issue is palpable in Brussels.

“We are really pushing hard so that energy efficiency will be a concrete deliverable of the 2030 package given the Ukraine situation,” one EU official told EURACTIV.

2030 targets

Until recently, the European Commission’s climate directorate had seen little appetite among EU states for 2030 targets that go beyond those proposed in a package in January, but EURACTIV understands that modelling for a 40% efficiency target has not been ruled out of a policy review that will take place this summer.

Internal discussion about the ‘discount rates’ used in such models has been intense, following criticism by the building sector and NGOs that they make efficiency investments seem unfairly costly.

A correction is unlikely though, as it would imply that the basis of the whole 2030 framework had been faulty, and a recommendation for a 30% target currently appears the more likely outcome.

Publication of the review may be delayed until September, partly to keep some policy gunpowder dry for the incoming new Commission.

The fraught nature of discussions over 2030 climate and energy goals and unpredictable tempo of events on the Russian border are also inspiring caution among policy-makers.     

Recent reports though have highlighted the potential of Europe’s houses and commercial buildings to completely remove demand for Russian gas. The continent’s building stock accounts for nearly half of all energy use and emissions, and is ripe for refurbishment.

Hard coal, crude oil

NGOs warn that Russian gas is not the only source of energy dependence. Europe imports 26.7% of its hard coal from Russia, according to Eurostat figures, and for countries like Poland, that figure is 60%.

Crude oil also accounts for 64% of the value of energy trade between the EU and Russia, and a third of the EU’s crude imports. Here too, the writing may be on the wall, albeit in Chinese, as Beijing has reportedly agreed to buy more than $350 billion of Russian crude oil in the coming years.

Jos Dings, the director of T&E, a sustainable transport group, told EURACTIV that the bloc’s €300 billion of oil imports accounted for almost 3% of GDP and were wasteful, polluting, and could be easily obviated by efficiency measures.  

“Burning less oil through smarter vehicles, cleaner fuels and better transport systems is a no brainer,” he said. “We should strengthen EU policy for clean fuels such as the fuel quality directive – not ditch it as the Commission says it wants to do – and we should extend the successful fuel efficiency standards for cars to cover lorries too.”

Russia’s gas export monopoly Gazprom sells its gas to EU clients under secretive bilateral deals.

An illustration on how Gazprom uses the price of gas as a political weapon was provided in the context of the unfolding Ukraine crisis.

Ukraine was paying Gazprom a price of $400 per thousand cubic metres (tcm) under an agreement signed under former Prime Minister Yulia Tymoshenko, back in 2009.

The EU has agreed for holding trilateral talks with Ukraine and Russia to discuss natural gas supplies to Ukraine and transit of Russian gas across Ukraine to the EU. A first round of such talks was held on 2 May and ended without concrete results [read more]. 

  • 28 May: EU energy security strategy expected to be published
  • June: EU Energy Council meets
  • Summer/autumn: EU review of progress towards meeting 2020 energy efficiency targets, and potential for 2030 targets to be published
  • Sept. 2014: Ban Ki-Moon to host climate summit in New York
  • Oct. 2014: EU Council to agree 2030 cimate and energy targets
  • Dec. 2015: UNFCCC Climate Summit in Paris

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