The European Union may have to contend with the cost of $214billion if it goes on with the threat to abandon its reliance on Russian gas.
As the European Union (EU) to tighten sanctions against rampaging Russia, the bloc announced the new plan EU to ban European vessels and companies from providing services to Russian shipping entities. A fortnight ago, the EU announced a phased ban on all Russian oil by the end of 2022.
Meanwhile, a report said yesterday that if the EU goes ahead with the latest threats to eliminate Russia’s gas and replace it ones from other sources, the bloc should be ready to contain the huge cost of about $214billion, more than envisaged, climate think-tank and organizations of Ember and Global Witness said in a statement yesterday.
The organisations called for faster renewables rollout. The statement noted European Commission’s REPowerEU plan to make Europe independent from Russian fossil fuels well before 2030, which includes diversification of gas supplies, speeding up the roll-out of renewable gases, increasing electricity generation from renewables, and replacing gas in heating and power generation.
The Commission said the plans can reduce EU demand for Russian gas by two-thirds before the end of the year.
According to Ember and Global Witness, the EU’s current plans for gas use could see an additional $264 billion (250 billion euros) added to the EU’s energy bill in 2030 due to high gas prices.
The statement said REPowerEU plan will only cut the bill by $49 billion (47 billion euro), which would still be an increase of $214 billion (203 billion euro) above the Commission’s original forecasts.
“And, whilst the European Commission’s REPowerEU strategy aims to reduce the continent’s imports of Russian gas, it still relies so heavily on gas that Europe would be exposed to a €34 billion bill rise at forecast 2030 prices, or €203 billion at today’s gas prices,” Ember and Global Witness said in the statement.
Casting doubts over the EU’s plans a senior analyst with Ember, Sarah Brown said, “Gambling on fossil gas is a losing bet. High and volatile gas prices are here to stay and will cost the EU dearly. The money is better spent on a transition that can bring stable, clean and affordable energy to all Europeans.
“Decades of over-reliance on fossil gas has made Europe incredibly vulnerable to volatile prices whilst empowering Putin. Our analysis now shows the Commission has massively underestimated the cost to consumers of continuing to rely on gas.”
The European Commission is expected to unveil the details of the REPowerEU plan next week, in which renewables are also expected to feature. The EC is expected to propose faster permitting for renewable energy projects as part of its plan to increase the uptake of renewable energy to cut reliance on Russian energy and speed up the energy transition.