IEA Urges the EU to Take Measures for Next Winter
- December 13, 2022
- Posted by: Quatro Strategies
- Category: Energy
The International Energy Agency (IEA) has warned the European Union on Monday that a gas shortage is possible next winter if Russia cuts gas supplies further. The agency has also urged the governments to act faster to conserve energy and expand renewable energy development. Europe has so far avoided an energy crunch for this winter thanks to full gas storage tanks, and milder than expected weather.
Next year could pose the real test for the bloc. This year’s energy shortage and high gas prices have already hiked fuel bills for households and forced industries to temporarily shut down. But if Russia further cuts the much smaller amount of gas it still delivers to Europe, the EU could face a shortage of 27 billion cubic meters (bcm) in 2023. Furthermore, Beijing’s ease of Covid restrictions could cause a rebound in gas demand in China, which would further push prices up. Total EU gas consumption was 412 bcm in 2021.
“This is a serious challenge,” IEA Executive Director Birol said during a joint press conference with the European Commission in Brussels.
The shortage could be averted by expanding subsidies and policies to renovate gas-guzzling buildings, replace fossil fuel-based heating with heat pumps and massively expand renewable energy, the IEA said.
European Commission President von der Leyen suggested establishing an EU “solidarity fund” to raise cash for energy investments, which would use both EU funds and additional sources.
Von der Leyen said the bloc’s gas supply was “safe for this winter” and it was preparing for the next one.
EU leaders will meet at a summit in Brussels on Thursday, where they are expected to call for preparation of early contingency plans for next winter’s energy supply.
Still, some countries are at odds over how to address high energy prices. EU energy ministers hold an emergency meeting on Tuesday to attempt to agree a gas price cap that has divided the bloc.
Last month countries held up deals on other measures over the price cap disagreement, including faster permits for renewable energy projects that will be crucial for replacing Russian gas and meeting the EU’s climate goals.
The €100 billion investment this requires would be paid back within two years through lower gas bills, Birol said.
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