EU signals turn to coal, accuses Russia of ‘rogue steps’ on gas

Pipes are photographed at the land landing facilities of the “Nord Stream 1” gas pipeline in Lubmen, Germany, March 8, 2022. REUTERS/Hannibal Hanschke

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BRUSSELS/OSLO, June 22 (Reuters) – The European Union will temporarily turn to coal to deal with dwindling Russian gas flows without derailing long-term climate goals, an EU official said on Wednesday, as a tight gas market and rising prices kicked off the race. for alternative fuels.

European leaders have turned to Russia as flows through the Nord Stream 1 pipeline have been cut to only 40% of capacity, exacerbating an energy crisis after the invasion of Ukraine prompted Europe to impose tough sanctions on Moscow.

To counter the gas shortage, the International Energy Agency (IEA) said Europe should replace Russian energy supplies while boosting efficiency and renewable energy sources, including nuclear power. Read more

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And the head of the International Energy Agency, Fatih Birol, warned in a statement to Reuters that Russia may continue to look for excuses to cut supplies or stop them completely as winter approaches. Russia denied that the supply cuts were premeditated. Read more

Germany, Italy and the Netherlands have indicated that coal-fired power plants can fill supply gaps, even as Germany prepares to host a Group of Seven summit after reaffirming its commitment to ambitious climate change goals. Read more

A senior European Commission official said Europe will temporarily seek to use fossil fuels alternatives to Russian gas in light of President Vladimir Putin’s actions.

“The illegal invasion of Ukraine by Russia has created a state of emergency in the European Union,” Elena Bardram, acting director of international affairs and climate finance at the European Commission, told the African Energy Forum in Brussels.

“With the very rogue moves that we are noticing from the Putin administration regarding Gazprom’s abrupt reduction of flow, we are taking some very important actions, but all of these actions are temporary,” she added.

She said the measures would be phased out as soon as possible because the EU was determined to stick to its climate targets.

Bardram, who headed the European Commission delegation to the 2015 Paris climate talks, added, “The EU’s 2030 and 2050 targets remain fully intact…While we may temporarily increase our use of coal, the longer-term trend is clear.”

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The countries have outlined a series of measures to tackle the supply crunch to address concerns about winter energy shortages and rising inflation that could test Europe’s resolve to maintain sanctions on Russia.

German Finance Minister Christian Lindner said Tuesday evening that there is a risk of a serious economic crisis and stressed the need for alternatives to overcome three or more years of energy scarcity.

A note from the Royal Bank of Canada predicted that the rate of filling gas storages would slow and governments would take measures to ease demand.

“Many countries seem to be rethinking coal shutdown,” she said, adding, “We don’t think the situation can be rectified with supply-side measures only, and we expect a significant response from the demand side.”

Another hot spot in the energy crisis could come in the Baltic states. President Gitanas Nosida has said that Lithuania is ready for Russia to shut it down from a common power grid in response to blocking rail shipments of some Russian goods to the Kaliningrad site in Moscow. Read more

Russian gas flows to Europe via the Nord Stream 1 pipeline and deliveries through Ukraine stabilized on Wednesday, but remained significantly lower than last week. Gazprom said it would cut flows through Nord Stream 1 last week, citing technical problems.

The benchmark gas price in Europe was trading at around €127 ($133) per megawatt-hour (MWh), below this year’s peak of €335, but still more than 300% above its level a year ago.

Europe is scrambling to fill up its winter gas stockpile – now at 55% – as it fears further disruptions to supplies from Russia, which has already cut off some customers.

Lindner’s warning came after German industry association BDI said a recession in Europe’s largest economy would be inevitable if Russia halted gas deliveries. Read more

The European Union and other developed economies have imposed sanctions on Russian oil and coal but have stopped importing gas.

The International Energy Agency said supporting aging nuclear infrastructure could provide respite from high energy prices and tight supplies.

“In light of the renewed interest in the role of nuclear energy in clean energy transitions, the war emphasized the need to explore options…investing in new facilities in addition to reopening existing (uranium) conversion plants.”

More broadly, the IEA said the $2.4 trillion to be invested in energy this year includes record spending on renewables, but it has failed to close the supply gap and tackle climate change.

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Additional reporting by Nina Chestney. Writing by Mathias Williams; Editing by Jason Neely and Elaine Hardcastle

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