Europe must prepare for total cut in Russian gas exports, says agency

THE International Energy Agency warned this Wednesday, 22nd, that the Europe must immediately prepare for a complete cut of Russian gas exports this winter in the Northern Hemisphere, urging governments to take steps to reduce demand and keep aging nuclear plants open.

Fatih Birolhead of the IEA, said that Russia’s decision to cut gas supplies to European countries last week can be a precursor of new cuts, since Moscow seeks to gain “leverage” during its war with ukraine.

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“Europe must be ready if Russian gas is completely cut off,” Birol told Financial Times in interview. “The closer we get to winter, the more we understand Russia’s intentions,” he said. “I believe the cuts are aimed at avoiding warehousing in Europe and increasing Russian leverage in the winter months.”

Executive Director of the International Energy Agency, Faith Birol, at a press conference in Denmark, pictured on the 8th of this month.  According to Biroo, measures taken by European governments so far are not enough if Russian exports are completely cut.
Executive Director of the International Energy Agency, Faith Birol, at a press conference in Denmark, pictured on the 8th of this month. According to Biroo, measures taken by European governments so far are not enough if Russian exports are completely cut. Photograph: Ritzau Scanpix / Reuters

The IEA, which is mainly funded by members of the Organization for Economic Co-operation and Development (OECD)was last year one of the first official bodies to publicly accuse Russia of manipulating gas supplies to Europe in preparation for Moscow’s invasion of Ukraine.

Birol said emergency measures taken by European countries this week to reduce gas demand, such as starting up old coal-fired power plants, were justified by the scale of the crisis, despite concerns about rising carbon emissions.

He said the increase in coal-fired generation is “temporary” and would help preserve the winter heating gas supply. Any additional CO₂ emissions from burning highly polluting coal would be offset by an acceleration in Europe’s plans to reduce its dependence on imported fossil fuels and increase renewable generating capacity, he added.

But Birol warned that measures taken by European governments so far are not enough if Russian exports are cut completely, and said countries should do everything possible to preserve supplies now to ensure storage can be filled before the months of Winter.

“I believe there will be deep demand measures [tomadas pelos governos na Europa] as winter approaches,” Birol told Financial Timesadding that the rationing of gas supplies remains a real possibility if Russia reduces exports further.

THE Sweden and the Denmark followed on Tuesday to Germanya Austria and the Netherlands in announcing the first phase of emergency plans to preserve gas supplies, but none of these national plans yet include rationing.

Europe has reduced its dependence on Russian gas to around 20% of total supplies since the Ukraine invasion, from around 40% before, according to consultancy ICIS, but has already seized most options to diversify supplies, such as maritime cargoes of liquefied natural gas.

The head of the IEA said countries should try to delay the closure of any nuclear power plants slated for closure to help limit the amount of gas flared in electricity generation.

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Germany faced constant criticism for its decision to continue decommissioning the last of its nuclear plants during the energy crisis. Berlin indicated that it believes the technical and safety hurdles to keeping the factories open are too high.

Birol said that without adopting policies to significantly reduce fossil fuel consumption, the world would continue to face dangerous swings in oil and gas prices. “Unless governments take the lead and mobilize large funds to create a clean energy transition, we will have to deal with extreme volatility in energy,” he said.

While there are some positive signs of increasing investment in cleaner forms of energy, in part due to Europe’s desire to end its addiction to Russian energy, he said that globally the picture is mixed at best.

In the developing world, excluding the Chinainvestment in renewable energy has not grown in real terms since 2015. Birol also said that developing countries dependent on fossil fuel production need to use the windfall of higher prices to diversify their economies.

“The relative weakness of clean energy investment in much of the developing world is one of the most worrying trends,” the IEA report said. / AFP and REUTERS

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