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200 billion plan to disconnect Europe from Russian energy by 2027

18 mei 2022

12:31

The European Commission is putting the turbo on greening and saving to get rid of Russian energy within five years. A maximum price for gas, which Spain, Italy and Belgium are asking, is not on the agenda for the time being.

The war in Ukraine is forcing Europe into a new, accelerated energy curve. The plans from two months ago, to get rid of Russian gas by 2030, will be sharply adjusted on Wednesday. The deadline to disconnect from Russian energy has been brought forward to 2027. The plan to cut two-thirds of Russian gas imports this year already remains in place.

Accelerated greening and energy savings are the common thread in the story that Commission Vice-President Frans Timmermans has in store. The EU plan, worth more than €200 billion, contains legislation as well as non-binding proposals and recommendations for Member States.

Solar panels

By 2030, energy consumption should be 13 percent lower, not 9 percent. That equates to an annual energy saving of 2 instead of 1.5 percent. The European targets for renewable energy must increase from 40 to 45 percent of total energy consumption. A rapid and massive rollout of solar panels should double the capacity of solar energy in Europe by 2025.

-13%

energy saving

The European Commission wants energy consumption to be 13 percent lower than today by 2030. In previous plans, that was still 9 percent.

This roll-out comes with an obligation. New homes, commercial and government buildings must install solar panels on their roofs from 2025. Member States must also set up a program to help existing buildings with an energy performance from class D – the least energy-efficient buildings – to a solar roof more quickly. The installation of solar panels can then be accompanied by roof renovation, energy storage and heat pumps.

Faster procedures

The construction of large wind and solar parks requires a considerable relaxation of the awarding approach. Today, the administrative procedures for a wind farm can take up to nine years, those for solar farms four years. The Commission is asking Member States to define zones where smoother and faster procedures can be applied, for example in industrial areas, along roads and railways. Nature areas or routes that use birds for migration are not eligible. In areas that do not belong to those special zones, the normal administrative procedure applies.

Timmermans and co. also want to use 20 million tons of renewable hydrogen by 2030, half of which via imports. Hydrogen is suitable for making heavy industry such as steel production emission-free.

The European Commission does not expect high energy prices to be a temporary phenomenon, but to persist until 2025.

The entire European energy plan, RePowerEU, requires more than 200 billion euros. But it is often old wine in new bottles: Member States can partly reorient their recovery plans and funds from the EU recovery fund to this.

In addition, the Commission will inject EUR 20 billion in additional loans into the European recovery fund, through the sale of part of the reserves to European emission allowances. These are certificates that large polluting companies have to buy for the emission of every ton of CO2.

Investments in infrastructure for the storage and transport of liquefied gas, for example, must be geared to the switch from gas to hydrogen. Just under half of that 200 billion will be recovered through the energy savings and investments that have been made.

Maximum price

The Commission does not expect the high energy prices to be a temporary phenomenon, but to last until 2025. However, the European Commission is only sparingly responding to the demand from Spain, Italy and Belgium for a maximum price for gas.

Only if Russia completely shuts off the gas tap for the whole of Europe will a coordinated crisis intervention be necessary, says the European Commission. It can, if at least two countries request it, declare a state of emergency and ration gas supplies for businesses and families. The least affected countries must then show solidarity to the most affected Member States. In practice, this leads to an administratively determined maximum price.

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