Brussels Touts REPowerEU Strategy for Green Energy Autarky

On 18 May 2022, the EU Commission presented a plan for rapid reduction of its reliance on Russian oil and gas and for fast-tracking its transition toward a more sustainable and self-sufficient energy supply.?The REPowerEU strategy?aims to eliminate the need for fossil fuels from Russia, which currently give Moscow important political and economic leverage and cost European taxpayers nearly €100 billion per year. Across the EU, 85 percent of citizens support the effort to wean the continent off Russian energy as a way of supporting Ukraine against Russia’s aggression.

The plan will enable energy savings, diversify Europe’s sources of energy supply, and accelerate the roll-out of renewable energy to replace fossil fuels in homes, industry, and power plants. To this end, the European Commission will make available a Recovery and Resilience Facility (RRF) intended to strengthen economic growth, security, and climate action as part of Europe’s green transformation.

The plan envisages both short- and long-term energy saving measures. In the near term, the EU suggests certain behavioral changes that could reduce the demand for oil and gas by 5 percent in private households and industries ahead of next winter, as described in its?“Save Energy” communication. Looking further into the future, the Commission has proposed long-term energy efficiency measures and aims to raise its binding Energy Efficiency Target from 9 percent to 13 percentunder the European Green Deal’s “Fit for 55” package. Member states will be encouraged to foster energy savings through fiscal instruments such as lower VAT rates on energy-efficient heating systems, building insulation, and appliances and products.

Besides direct energy savings, another swathe of measures is planned to promote the rollout of renewable energy generation and limit the use of fossil fuels for mobility and industrial manufacturing. The Commission aims to increase the 2030 target for renewables from 40 percent to 45 percent. To this end, the REPowerEU package would aim to double the EU’s solar PV capacity by 2025 and install 600GW of new generation capacity by 2030. The plan calls for a Solar Rooftop Initiative with a phased-in legal obligation to install solar panels on new public, commercial, and residential buildings; doubling the deployment rate of heat pumps; and measures to integrate geothermal and solar thermal energy in district and communal heating systems.

One of the main pillars of the proposed REPowerEU strategy is the diversification of energy sources and supplies, including international partnerships with suppliers of liquefied natural gas (LNG) and voluntary schemes for member states to place common purchases of gas, LNG, and hydrogen by pooling demand, as well as by optimizing and coordinating the use of their respective infrastructures and their outreach to suppliers.

The increased use of green hydrogen, which has already been part of the EU’s future energy planning for some time, would be stepped up under the REPowerEU scheme, which sets a target of 10 million tonnes of domestic renewable hydrogen production and 10 million tonnes of imports by 2030. This sustainable and easy-to-store energy source has the potential to replace natural gas, coal, and oil in industries and transport sectors that are difficult to decarbonize, such as the aviation industry. The Commission aims to set aside €200 million in additional funding for research in this area.

Under its External Energy Strategy, the EU plans to build partnerships as well as major hydrogen corridors to potential suppliers in the Mediterranean and North Sea. In response to Russia's aggression in Ukraine, the Commission said it would support Ukraine, Moldova, the Western Balkans and Eastern Partnership countries, and other partners as part of an integrated strategy for energy autarky and decarbonization. In an indication of how diverse the EU’s future supply network for hydrogen might be,?Namibia has been lobbying?European capitals in recent months to become a supplier of green hydrogen, which the African country plans to produce from solar and wind power as well as desalinated seawater.

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Chris Findlay

Editor & Relationship Manager at Supertrends