IEA warns that Europe’s energy war with Russia is not over

The pinnacle of the Worldwide Vitality Company has warned that Europe has not but received its vitality struggle with Russia regardless of a giant drop in gasoline costs, urging governments to stay targeted on conserving and boosting provides.

Fatih Birol mentioned that whereas the EU had largely averted a full-blown vitality disaster following Russia’s weaponisation of gasoline provides, which had as soon as sparked fears of widespread shortages and blackouts, subsequent winter may show a better problem if the continent suffered colder climate.

“Russia performed the vitality card and it didn’t win . . . however it will be too robust to say that Europe has received the vitality battle already,” Birol informed the Monetary Instances.

“I feel Europe did a superb job, [its strategy has] been a giant success. However being overconfident for subsequent winter is dangerous and it’s time to proceed and step up efforts for 2023.”

European pure gasoline costs have fallen as a lot as 85 per cent since peaking above €300 per megawatt hour in August, as efforts to acquire various sources, conservation of present provides and hotter climate have left ample gasoline in storage as the tip of winter nears.

That has led some trade figures to declare that Moscow has already misplaced the vitality struggle it unleashed to attempt to weaken western assist for Ukraine, as the primary anniversary of Russia’s full-scale invasion approaches on February 24.

Birol mentioned that whereas Europe had “moved mountains” to make sure it may change Russian vitality and had lower Moscow’s revenues with retaliatory oil sanctions, it couldn’t afford to lose deal with conservation or creating renewable vitality sources.

European Fee President Ursula von der Leyen, left, and Fatih Birol, govt director of the Worldwide Vitality Company © Olivier Hoslet/EPA-EFE/Shutterstock

“A number of the achievements made on clear vitality and decreasing Russia’s revenues are good however it isn’t a everlasting answer. Now we have had the assistance of gentle climate. We gained a while, which is important, however there’s way more to do.”

Birol has warned that Russia may lower the remaining 20 per cent of prewar gasoline provides it nonetheless sends to Europe by means of pipelines through Ukraine and Turkey, whereas competitors for seaborne liquefied pure gasoline provides is more likely to enhance as China’s economic system continues to reopen.

That might make refilling European storage amenities over the summer season months more difficult and take a look at the continent’s capability to keep away from shortages ought to subsequent winter show to be notably chilly.

He warned in November {that a} chilly winter may depart Europe struggling to refill its gasoline storage websites to even 65 per cent of capability by October 2023. However as of Monday Europe’s gasoline storage ranges have been already at 64 per cent of capability, far greater than standard for the time of yr.

Regardless of some European nations rising their use of extremely polluting coal for energy era — to preserve gasoline for heating and trade — EU emissions fell 2.5 per cent in 2022 due to decrease gasoline utilization and the nice and cozy begin to winter, the IEA chief mentioned.

Birol has been pushing for a longer-term transformation that not solely provides renewable vitality sources but in addition ensures a bigger proportion of wind generators or batteries is manufactured in Europe. He has met European Fee President Ursula von der Leyen twice prior to now week, arguing the EU wants to make sure it by no means turns into too reliant on anyone nation for its vitality provides — or provide chains — once more.

“We’re coming into a brand new industrial age of fresh vitality know-how manufacturing,” he mentioned. “The 2 powers [in clean energy manufacturing] are China and the US — counting on one single nation is all the time a foul thought. So if we would like diversification Europe is an effective candidate.”

European gasoline costs have been nonetheless two to a few occasions greater than earlier than Russia’s provide cuts, leaving European trade at a drawback. “The European economic system remains to be on its ft — it didn’t see a serious financial recession even when they undoubtedly took a giant hit,” Birol mentioned.

“However costs are nonetheless seven occasions greater than within the US; electrical energy costs are thrice greater than in China,” he added. “The lasting answer to vitality safety needs to be based mostly on clear vitality.”

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