EU Energy Independence

In May 2022, a few months after Russia's full-scale invasion of Ukraine, the European Commission presented the REPowerEU action plan. The proposals set out in the document, which were developed unplanned and in a short time frame, were intended to strengthen the energy independence of the EU and weaken the close ties of European countries to the aggressive regime of Vladimir Putin's Russia.

"We must reduce our dependence on Russia for energy as soon as possible," said European Commission President Ursula von der Leyen. "Our proposals relate to Europe's energy security, our defense and support for Ukraine."

The European Commission's presentation statement also emphasized that 85% of Europeans believe that the EU should reduce its dependence on Russian gas and oil as soon as possible to support Ukraine.

"There is a double urgency to transform Europe's energy system: ending the EU's dependence on Russian fossil fuels, which are used as an economic and political weapon and cost European taxpayers nearly €100 billion per year, and tackling the climate crisis," the European Commission said in a statement.

Russia's unprovoked and unjustified military aggression against Ukraine and the Kremlin's outright blackmail of its European partners have led to serious disruptions in the global energy system. Energy prices have reached peaks, making energy security a priority and the EU's dependence on gas, oil and coal imports from Russia a threat. Moreover, the record amounts paid by democratic states to Russia were used to finance the largest war in Europe since both world wars.

The EU has decided to immediately reduce its dependence on Russian fossil fuels and accelerate its energy transition. Energy savings, diversification of energy supply in the EU, rapid replacement of fossil fuels by accelerating Europe's transition to clean energy, and a smart mix of investments and reforms were the basic steps to strengthen the EU's strategic autonomy in the energy sector.

Source: eur-lex.europa.eu

Transition to clean energy 

Fit for 55 package has a goal of reducing EU emissions by at least 55% by 2030 and achieving climate neutrality by 2050. These goals are enshrined in European climate legislation, including the so-called European Green Deal. The REPowerEU plan is based on the full implementation of the Fit for 55 package, supporting the transition to clean energy and joining forces for a more sustainable energy system.

EU countries have implemented certain sections of REPowerEU into their national legislation - Recovery and Resilience Plans (RRPs) - to "finance key investments and reforms that will help achieve the EU's strategic autonomy by diversifying its energy supply." This includes increasing the use of renewable energy sources, improving energy efficiency and energy storage capacity.

To finance investments and reforms, instruments have been developed to provide additional grants in the amount of 20 billion euros. The sources of funding are the Innovation Fund (60%) and the initial ETS allowances (40%). The key factors in the allocation are cohesion policy, member states' dependence on fossil fuels, and rising investment prices.

The main goals to be achieved include energy saving, diversification of energy supply, and accelerated deployment of renewable energy sources.

In particular, reforms and investments should focus on

• Improving energy infrastructure and facilities to meet immediate needs for security of gas supply, including liquefied natural gas (LNG);
• ensuring diversification of supplies in the interests of the EU;
• improving energy efficiency in buildings and industry;
• decarbonization;
• Increase the production and use of environmentally friendly biomethane and hydrogen from renewable sources or without the use of fossil fuels;
• increasing the share and accelerating the deployment of renewable energy; addressing energy poverty;
• stimulating the reduction of energy demand;
• removing bottlenecks in domestic and cross-border energy transmission and distribution;
• support for zero-emission transport and its infrastructure, including railways; and support for energy storage.

EU Member States are called upon to ensure synergies and complementarities to jointly achieve these ambitious results.

Transforming consumption habits 

The search for solutions for environmental independence is also transforming the way we consume, even at the household level. The European Heat Pump Association (EHPA) reports that a growing number of European countries have begun to introduce the practice of eliminating fossil fuel heating systems when designing private and apartment buildings. Subsequently, it is planned to replace the equipment in existing buildings.

Thermal energy consumption in buildings will decline over the next three decades. Between 2025 and 2026, heating systems will be upgraded in terms of energy efficiency, and starting in 2025, all forms of subsidies for natural gas heating and hot water systems will be canceled. A complete change of technologies should take place by 2030.

The main trend in the transition is the use of renewable heating, cooling and hot water. This is emphasized by the European Union's requirements for the construction of new buildings to meet near-zero energy consumption standards, according to which the demand for thermal energy should fall to the lowest possible levels.

The Ukrainian factor

In 2022, at an international conference in Lugano, Switzerland, representatives of 40 countries and 20 international organizations committed to working together for Ukraine's post-war recovery. A year later, in summer 2023, during the Ukraine Recovery Conference-2023 in London, an international coalition of politicians, officials, and businessmen confirmed their intentions. The lion's share of infrastructure projects and potential investment magnets are focused on Ukraine's energy potential.

According to experts, Ukraine has every chance of becoming the largest electricity supplier to the European Union. The energy that the Ukrainian energy system is already capable of producing and exporting to the EU can reduce gas consumption in the thermal generation segment by 17%.

But the main treasure attractive to international investors is Ukraine's potential for green energy development. Let's compare – the weighted average feed-in tariff in Ukraine is 88 euros, which is almost 5 times lower than the price on the European electricity market.

Future investments in the Ukrainian national program "Energy Independence and Green Deal" are already estimated at $130 billion.

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According to the latest data from the International Energy Agency (IEA), the total EU electricity consumption in 2022 and 2023 declined at a record pace. In total, the decline reached 6% over two years being the lowest rate in the last 20 years.

It seems that the EU countries are successfully managing to follow their own energy independence strategy. The results will be even more impressive when Ukraine joins the EU's energy security.