No quick solutions

Speed read

  • The EU is highly dependent on imported fossile fuels, in particular from Russia
  • The EU should look to increase storage levels of fuels and develop emergency infrastructure such as reverse flows for gas
  • In the medium/long terms, energy efficiency measures have the potential to reduce energy consumption and imports
One of the points that became very obvious as we were writing the first Hot Energy Topic with our INSIGHT_E partners this week is that there are no quick solutions to Europe’s strong dependence on imported fossil fuels. While the year 2013 gave some reasons for optimism in the EU; the share of fossil fuels in the energy mix fell to a record low (77%), renewables reached a record high of almost 7% and the EU’s fossil fuel imports fell to the lowest level in a decade. At the same time 2013 demonstrated how quickly market dynamics change with gas imports from Russia expanding by almost 20% thus increasing Russian share of EU’s consumption to 31%, while imports from Norway declined to a share of 23% and North African imports declined to 6% of consumption. The simple fact is that the European Union is resource poor in terms of hydrocarbons with small reserves of oil (< 0.4% of global proven reserves) and gas (< 0.9% of global proven reserves) but significant resources of coal exist in Germany, Poland and Czech Republic. The EU is therefore highly dependent on energy from outside its borders, importing just over 50% of all the energy it consumes at a cost of more than one billion euro per day. The fuel mix of the EU has only presented slight changes over the past decade. Oil consumption has remained at high levels, followed by gas, solid fuels, nuclear and renewables. EU import dependency rose significantly in the late 1990’s as a result of a decline of indigenous production. Norway is an important source of natural gas for the EU. Norwegian gas production activity is mature, with significant infrastructure in areas of the North Sea where the geology is well known, therefore large new discoveries are less likely than previously in these areas; however, gas supply is expected to gradually increase over the next five years. The Dutch Groningen gas field (one of Europe’s largest gas fields) is to cut gas production by 25% over the next three year as a result of problems with seismic activity and this will negatively impact on Europe’s secure supply capacity. The combination of import dependency, geographical diversification of energy imports, and diversification of energy sources in the energy mix helps assess the extent to which a country is vulnerable in terms of security of energy supply. An aggregate indicator combining factors related to energy security measured Malta and Cyprus to be the most vulnerable countries in the EU, followed by Luxembourg, Ireland, Estonia, Lithuania and Greece. So what can be done? Here are three brief ideas (more are presented in the current HET on Strengths and weaknesses of EU security of supply): In the short term not many options are available however the EU should look to increase storage levels of fuels and develop emergency infrastructure such as reverse flows for gas. In the medium term a lot more action is required on energy efficiency both in industry and at a residential level. Energy efficiency measures have the potential to reduce energy consumption and imports. Equally, an ambitious renewable energy target for 2030 at the EU level will contribute to increase the share of indigenous renewable energy sources in the Union’s energy mix, thereby reducing EU energy dependency. All these options will require effort and a strong level of ‘buy in’ from the public and stakeholders. Over the course of the INSIGHT_E project we hope to investigate these and other issues in greater detail and presents findings and observations for discussion on this forum.

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