By Nicholas Earl
The European Union (EU) faces a €100bn bill to stave off supply shortages next winter, warned the International Energy Agency (IEA).
The Paris-based climate group expects the bloc to have sufficient supplies for this winter, but has called on governments to act faster to save energy and expand renewable generation.
It forecasts that the troubled bloc faces a potential gas shortfall of 27bn cubic meters next year, if Russia cuts supplies further and Chinese gas demand rebounds from COVID-19 lockdown-induced lows.
The IEA suggests shortage could be averted by expanding subsidies and policies to renovate gas-guzzling buildings, replace fossil fuel-based heating with heat pumps and massively expand renewable energy, at a total cost of around €100bn.
This could be paid back within two years through lower gas bills, claimed its executive director Faith Birol.
He told a press conference with the European Commission in Brussels, “This is a serious challenge.”
Despite more than halving Russia gas deliveries this year, the EU has averted a severe shortage and started the winter with brimming gas storage tanks, currently topped up to nearly 90 per cent.
This follows emergency EU measures to fill storage, alongside unseasonable warm winter weather last month, while a global economic downturn has reduced demand for the fuel.
Meanwhile, European Commission President Ursula von der Leyen has suggested forming an EU “solidarity fund” to raise cash for energy investments – using both EU money and additional funding sources.
Von der Leyen argued the bloc’s gas supply was “safe for this winter” and revealed the 27-country EU was preparing for next winter.
UK gas exports into Europe recently climbed to six-year highs, with the island acting as a stepping stone for LNG supplies entering the continent.
EU push for unity amid price cap division
EU country leaders are expected to discuss early contingency plans for energy supplies next winter at a summit in Brussels later this week, according to news agency Reuters.
However, member states remain at odds over a gas price cap, which continues to divided the bloc.
The spat has seen deals on faster permits for renewable projects held up, with countries unable to agree on the pricing level for any gas price cap.
Earlier this month, the bloc and G7 finally agreed an oil price cap of $65-70.
Alongside continental disputes, the energy crisis is affecting domestic issues as well.
RTE announced that France’s electricity network operator requested emergency help from the UK as the cold snap caused demand to surge across Europe.
It asked the National Grid if it could halve its scheduled exports through one of its interconnectors to the UK between 8am and 9am this morning as it grappled with a sharp uptick in demand.
This contributed to National Grid putting two Drax coal power plants on standby in case of a supply crunch later today.
The electricity system operator eventually stood down the request – the second time it has stopped short of emergency measures this month at the eleventh hour.
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