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The European Union faces a potential shortfall of almost 30 billion cubic meters of natural gas in 2023, but this gap can be closed and the risk of shortages can be avoided through more intensive efforts to improve energy efficiency, deploy renewable energy, install heat pumps, promote energy savings and increase gas supplies, says the IEA in a new report published today.
The report – How to avoid gas shortages in the European Union in 2023 – sets out a set of practical actions that Europe can take to build on the impressive progress that has already been made in 2022 to reduce dependence on Russian gas supplies and fill up gas storage before this winter. The report warns that 2023 may well prove to be an even tougher test for Europe as Russian supplies could fall further, global supplies of liquefied natural gas (LNG) will be tight, especially if Chinese LNG demand picks up, and Unusually mild temperatures seen at the start of the European winter are not guaranteed to last.
IEA Executive Director Fatih Birol presented 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 December 15.
“We have managed to resist 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 a mobilization of up to 300,000 million euros of investments. The result of all this is that we are safe for this winter,” he said. The President of the European Commission, Úrsula von der Leyen. “So now we are focusing on preparing for 2023 and next winter. To do this, Europe must intensify its efforts in various fields, from international projection to the joint purchase of gas and the increase and acceleration of renewable energy and demand reduction.
“The European Union has made significant progress in reducing dependence on Russian natural gas supplies, but it is not yet out of the danger zone,” he said. IEA Executive Director Fatih Birol. “Many of the circumstances that allowed EU countries to fill their storage sites before this winter may not be repeated in 2023. The new IEA analysis shows that a further push in energy efficiency, renewable energies, heat pumps and simple energy saving actions. to avoid the risk of shortages and new vicious price spikes next year.”
As a result of the measures taken by European governments and companies throughout 2022 in response to the energy crisis, as well as the destruction of demand caused by huge price increases, the amount of gas in storage sites in the EU far exceeded the five-year average at the beginning of December, providing an important buffer heading into winter. Consumer actions, rising gas supplies outside of Russia and mild weather also helped offset the drop in Russian deliveries in 2022.
Measures already taken by EU governments on energy efficiency, renewable energy and heat pumps should help reduce the size of the potential gap between gas supply and demand in 2023. A recovery in nuclear power production and hydroelectric power from its decade low levels in 2022 should also help narrow the gap. Despite all this, the potential gap between EU gas supply and demand could reach 27 billion cubic meters by 2023 in a scenario where gas deliveries from Russia fall to zero and LNG imports of China will rebound 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, the report’s analysis shows.
To incentivize faster improvements in energy efficiency, the report recommends expanding existing programs and increasing support measures for home renovations and the adoption of efficient lighting and appliances. It also recommends using smarter technologies and encouraging the switch from gas to electricity in the industry.
To speed up permitting for renewable energy, the report proposes adding administrative resources and simplifying procedures. He also proposes 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 use and details various programs from a wide range of countries that can serve 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 the gas currently flaring. The report also details opportunities to increase the production of low-emission biogas.
Together, these measures offer a path to avoid price spikes, factory closures, increased use of coal for power generation and fierce international competition for LNG cargoes, in a manner consistent with the EU’s climate objectives.