Page 4 - FSUOGM Week 14 2022

FSUOGM COMMENTARY FSUOGM

EU plans to phase out Russian

gas quickly will be "extremely

challenging," warns OIES

The OIES has flagged up a number of problems with the strategy

EUROPE THE EU’s plan to cut Russian gas purchases ignore the issues in relation to the contractual
by two thirds by the end of this year will be problems of reducing EU imports by two thirds,”
WHAT: “extremely challenging” to achieve, even if the the OIES report stated.
The EU wants to reduce issue of contractual obligations is ignored, the Adding an extra 10 bcm of non-Russian
Russian gas imports by Oxford Institute for Energy Studies (OIES) has pipeline supply is feasible, the OIES said, but the
two thirds within a year. said in a report. 50 bcm expansion in LNG imports “only looks
Under its REPowerEU plan, the European achievable if the strong supply growth we expect
WHY: Commission is looking to achieve the reduction is realised, and the rest of the world actually
The bloc wants to deprive in Russian imports by expanding LNG sup- reduces LNG consumption., which seems an
Russia of one of its key ply by 50bn cubic metres, increasing deliveries unlikely outcome.”
revenue sources. from other pipeline suppliers by 10 bcm and Likewise, the growth in biomethane produc-
ramping up biomethane production by 3.5 bcm. tion looks optimistic, as does the displacement
WHAT NEXT: It is also targeting a 14 bcm cut in gas demand of 20 bcm of gas demand in the power sector
The OIES warns that through energy saving, a further 4 bcm reduc- through the deployment of renewables, the
the strategy will be tion through greater use of rooftop solar installa- OIES said. Increased switching to rooftop solar
"extremely challenging" tions and heat pumps, and a 20 bcm cut in power and heat pumps also looks unlikely by the end
to implement, both on the sector demand by bringing more wind and solar of the year.
demand and the supply energy online. Furthermore, the energy-saving measures
sides. At the same time, the Commission wants EU could be achieved relatively easily if the weather
gas storage facilities to be 90% full by the start of is mild at the end of 2022, but “virtually impossi-
October, to strengthen the bloc’s energy security ble” if it is colder, the OIES said. If the gas storage
amid the risk that Russia could cut off supply. requirement is factored in, the need for demand
“Overall, the achievement of the seven-point reductions and increased alternative supplies
plan looks extremely challenging, even if we amounts to 120-125 bcm.

P4 www. NEWSBASE .com Week 14 06•April•2022