The countries of the European Union have successfully passed through a frightening winter for many politicians and citizens after the start of the Russian invasion of Ukraine and the subsequent disruption of Russian natural gas supplies. The EU diversified its resources and radically reduced its dependence on Russian gas, oil and coal during this time. This can be attributed to the success of the LNG market, energy savings, but also because of a mild winter. Eleven countries have agreed on a declaration regarding closer cooperation in nuclear energy, which may give a new impetus to its use in the European energy mix.
From the start of the Russian invasion of Ukraine, it was clear that the war would have consequences not only for the two countries involved but also for the Member States of the European Union (EU). The EU decided to counter the Russian attack with humanitarian, military and financial aid to Ukraine alongside sanctions and initiatives aimed at reducing dependence on Russian energy resources. Such initiatives include the REPowerEU, with the primary purpose of saving energy, producing it cleanly and diversifying energy resources. However, REPowerEU combines short- and medium-term objectives, with the medium-term ones to be achieved by 2027. In reality, sanctions have been vital in reducing dependence on Russian energy raw materials. In the fifth package of sanctions, Member States agreed to ban imports of Russian coal starting from 10 August 2022. The sixth package of sanctions banned imports of Russian oil by sea, effective from 5 December 2022, while maintaining an exemption for oil imports via pipelines. This was mainly due to the high dependence of Central and Eastern European countries without the possibility of substituting the volumes of imported oil from other suppliers.
None of the ten sanction packages has restricted gas imports so far. Yet fears of gas supply disruptions or shortages and high prices in Europe have been enormous. In 2021, Russian gas accounted for 45% of all natural gas imports in the EU—this is also why politicians have yet to adopt specific sanctions on imports. However, in response to the sanction packages and individual countries’ actions, Russia has begun to reduce gas exports from its territory. It has gradually cut off supplies to Bulgaria or Denmark and stopped gas flow via the Nord Stream 1 pipeline to Germany. This has also been one of the causes of high gas prices, as the cost of electricity in the EU is linked to the price of gas on the stock exchange. At the end of August 2022, the gas price on the benchmark Dutch TTF exchange had soared to almost €350 per megawatt hour. Later, it started to fall and currently stands at €45/MWh. For reference, before 2021, the average gas price was around €15/MWh.
So how have the Member States and EU managed to cope with the risk of the coming winter period and threatened gas supplies? There is a confluence of several factors. Today, we can assess the EU’s measures as a success as the heating season in Europe ends on 31 March. In addition, the EU Energy Commissioner Kadri Simson said on 27 February, “Europe is now more energy secure, less dependent on Russia and stronger than it was a year ago.”
One of the main measures that have helped the EU states get through the winter is the European Commission (EC) regulation from March 2022, which obliged member states to reach 80% underground gas storage fillings by November 2022. Storage tanks typically cover around 30% of the gas consumed during the heating season, and their fill rate has been a hot topic over the past year. However, filling the reservoirs would not be possible without new contracts and diversification of the gas supply. The EU has taken full advantage of the LNG market and almost doubled LNG imports, especially from the US. Compared to 83 billion cubic metres in 2021, the EU imported 141 billion in 2022. When analysing these factors, one should remember the energy savings agreed upon by the Member States and the voluntary target of reducing gas consumption by 15%, which they eventually exceeded and collectively achieved a saving of 19%. Other aspects of a successful winter include the development of renewable sources, a very mild winter in terms of temperature, and the return of coal as a source for electricity generation.
The EU has successfully reduced Russian gas supplies from 45% in 2021 to 12.9% by the end of 2022. It is a significant reduction in dependence. Together with the ban on imports of Russian coal and the radical reduction in oil imports, this puts European countries in a favourable and more energy-secure situation. The nuclear sector remains problematic, with many countries dependent on nuclear fuel imports. This may also be one of the reasons for the new ‘nuclear alliance’ between 11 EU countries initiated by France. In the declaration, the ministers of the individual countries, including Slovakia, pledged to cooperate more closely in the field of nuclear energy, to strengthen research and innovation, and to promote joint projects —for example, in the area of small modular reactors, which are being discussed as the future of nuclear energy. Germany is not part of this alliance as a traditionally anti-nuclear country. Other big states, such as Spain or Italy, are also not a part of this alliance. However, the number of countries may increase in the future.
Photo credit: Flickr.com/
Photo credit: Flickr.com/ Celtis Australis