REPowerEU will only cut the bill by €47 billion - underlining the need for more ambitious renewables targets
11th May 2022, Brussels - The EU’s current plans for gas use could see an additional €250 billion added to the EU’s energy bill in 2030 due to high gas prices. Meanwhile the European Commission's REPowerEU proposals to reduce gas use would still see an increase of €203 billion above the Commission’s original forecasts, according to new analysis by Ember and Global Witness.
The analysis calculated the cost of EU gas imports and production under different scenarios for gas demand, comparing these to the cost forecasts originally prepared by the European Commission. Planned levels of European gas use under the EU’s “Fit-for-55” policy package would see at least €42 billion more being spent on gas in 2030 than originally anticipated, according to current market gas price forecasts, but if today’s high prices continue this rises to a staggering €250 billion.
And, whilst the European Commission’s REPowerEU strategy aims to reduce the continent’s imports of Russian gas, it still relies so heavily on gas that Europe would be exposed to a €34 billion bill rise at forecast 2030 prices, or €203 billion at today’s gas prices.
Instead, putting energy savings and renewable energy, like wind and solar, at the heart of the EU’s energy strategy - such as the joint NGO energy scenario for 2030 - could significantly reduce its 2030 energy spend, with savings of at least €21 billion at the projected price, or a colossal €123 billion at today's price.
Sarah Brown, a Senior Analyst with Ember, said:
“Gambling on fossil gas is a losing bet. High and volatile gas prices are here to stay and will cost the EU dearly. The money is better spent on a transition that can bring stable, clean and affordable energy to all Europeans.”
The analysis shows that even minimal shifts in the gas price have huge cost implications. Every €1/MWh of additional gas use equates to a €3 billion invoice to the EU. On a single day in March the 2030 price jumped by €2.34/MWh, underlining the scale and reality of the economic risk.
Tara Connolly, Senior Gas Campaigner at Global Witness, said:
“Decades of over-reliance on fossil gas has made Europe incredibly vulnerable to volatile prices whilst empowering Putin.Our analysis now shows the Commission has massively underestimated the cost to consumers of continuing to rely on gas. It needs to go back to the drawing board on its current gas market proposals to ensure they deliver a rapid phase out of gas. Ending the EU’s deep gas dependency protects people from price rises, helps us fight the climate crisis and denies Putin the funds for his brutal invasion of Ukraine.”
Ember and Global Witness are calling on the EU to accelerate the clean transition away from all fossil fuels, with a ramping up of renewables and energy savings. This must include increasing the EU’s 2030 renewable energy target to at least 50% and energy savings target to 45%.