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EU must prepare for rationing gas

20 April 2022
Consumers
Energynomics

EU countries are scrambling for new sources of gas to phase out Russian fossil fuels and punish Moscow for its brutal war in Ukraine. But in the rush to diversify, Europe once again risks overlooking a no-regret solution: energy conservation, according to Euractiv.

In its REPowerEU plan outlined last month, the European Commission estimated that 10 billion cubic meters (bcm) of gas could be saved by next winter if all households turned down their thermostats by 1°C. Frontloading deployment of rooftop solar panels and heat pumps could shave off a further 2.5 and 1.5 bcm respectively by the end of this year, the EU executive said.

These efforts are laudable but they pale in comparison to the 155 bcm of gas that the EU imported from Russia last year. And alternative supplies of liquified natural gas from the US or Qatar will not be sufficient to plug the gap.

If Russian gas goes missing next winter, Europeans will therefore have to prepare for rationing.

Gas rationing will hit people where it hurts most: right in their very homes. Gas is the dominant source of energy for households (32.1%) with the residential sector – mostly heating – accounting for most EU gas demand (40%), followed by industry and gas use for power generation, according to the EU agency for the cooperation of energy regulators (ACER).

The reduction of gas consumption in buildings must therefore become an urgent political priority. And yet, efficiency is still the neglected child of EU energy policy. Energy-saving targets have so far never been imposed as a legal obligation on EU member states, and have consistently been missed as a result.

The barriers are well-known: insulating millions of individual homes scattered across dozens of European countries and switching them to renewable heating systems takes time and is fraught with practical complications. Support for homeowners and financial incentives are not enough to spur renovation at the speed and scale required. These are colossal efforts that are best planned over decades, not months.

Yet the economic case for saving energy has never been stronger. The latest research by Fraunhofer, a German public institute, shows that energy savings have become more attractive economically as energy prices rise. Gas prices have multiplied sixfold in the first quarter of 2022 compared to one year earlier, so assuming a doubling of energy prices until 2030 seems plausible, if not conservative. This means the EU could aim for energy savings of 23% by 2030 instead of the 9% proposed in the European Commission’s revised energy efficiency directive tabled last year, the German researchers found.

“The EU can and must increase its energy-saving ambition. It will keep our energy bills in check and accelerate the phase-out of Russian oil and gas,” said Stefan Scheuer, a consultant who reviewed the research.

 

Autor: Energynomics

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