Europe’s Energy Efficiency Plan May Reduce the Need for Russia’s Gas

Russia's latest move adds a further dimension to already volatile gas supplies and adds importance to a European energy efficiency plan.
Published: Wed 17 Sep 2014

Russia is hitting back at Western sanctions by reducing gas supplies to Europe. Poland, Slovakia and Germany have all reported large reductions in gas deliveries from Russia this week. Polish authorities have reported that natural gas deliveries from Russia have dropped by 45%.

This is obviously a major cause for concern since Russia is Europe’s biggest fuel supplier but this dependence could be reduced rather significantly if EU leaders place a higher priority on energy efficiency savings, according to the Institute for Public and Policy Research.

Russia currently supplies Europe with 30% of its gas, 35% of its crude oil and 26% of its solid fuels, according to Eurostat.

Europe imports about a third of its gas from Moscow and half of that flows through Ukraine. While only 15% of the UK's gas comes from Russia, six of the states closest to the Russian border are heavily reliant on it. The concern is that Russia will turn off the tap on its gas supplies to Ukraine, as it did in 2006 and 2009. This raises fears of a "gas crunch" this winter, if the crisis in the Ukraine is not resolved.

Delivering Energy Security

"Recent events in Ukraine and the Middle East have served to highlight the vulnerability of our energy supplies and the political straitjacket that results from our over-dependence on fossil fuel imports from these volatile regions," the UK's former climate and energy security envoy, Rear Admiral Morisetti, said. "The quickest and most effective form of energy security is to use less," he added. "EU leaders are currently discussing whether to mandate energy efficiency improvements of 30% by 2030; studies show that we can go to 40% without incurring economic penalties, and Ukraine shows that we must."

The EU is poised to announce three climate and energy targets for 2030 at a summit next month. Leaked documents suggest that these will include a legally mandated 40% greenhouse gas emissions cut, and two 30% goals for renewable energy market share, and improved energy efficiency.

Energy efficiency has become a major focus point in Europe as the continent works towards reducing the effects of climate change, and improving energy security. The continent’s fossil fuel supply has been decreasing rapidly and renewable energy such as solar and wind power are being deployed. As these new generation sources are being implemented, energy wastage is also becoming a major cause for concern..

Overcoming costly fuel supplies and aging energy infrastructure

Earlier this year, the International Energy Agency warned that the EU's annual fuel bill could reach US$615bn by 2035. The agency expects European fossil fuel production to halve between 2010 and 2050, and predicts costly overhauls for ageing and high-polluting energy infrastructure.

The situation is particularly acute in Bulgaria, Estonia, Finland, Slovakia, Latvia and Lithuania which the European commission judges 100% dependent on Russian gas. By contrast, France, Denmark, the Netherlands, Romania and the UK source around 20% or less of their supplies from Gazprom. Gazprom deals taken on by some European countries like France and Austria do not make the situation any easier as it stands in the way of biogas investment for instance.

"The countries that are most dependent on Russian gas are also the least fuel-efficient, and improvements in energy efficiency could vastly reduce the scale of our dependency on Russia," said Joss Garman, a senior fellow at the IPPR. "European leaders should adopt a new, binding EU-wide target for energy efficiency of 35% by 2030. Britain should overcome its aversion to an energy efficiency target as part of its broader response to Russian aggression."

While this response is in reaction to the volatile gas supply, it is exciting news for the renewable energy industry, as well as for demand management and other energy service providers. Not only will this move be good for energy security and the environment, it will also create jobs in the energy industry and lower energy bills in the long run. Perhaps it takes events like this to push sluggish strategies into action. Perhaps Russia is cutting off its nose to spite its face. Time will tell.