EU Can Cut Its Russian Gas Imports by a Third, IEA Says

(Bloomberg) -- The European Union can slash imports of Russian gas by a third within a year by increasing purchases from elsewhere, ramping up renewables and boosting energy efficiency, according to the International Energy Agency.

Under a 10-point plan published Thursday, the IEA said that efforts to phase out Russian gas can still be compatible with the bloc's climate ambitions. The need to curb reliance on the region's biggest supplier has long been debated in Europe, but the geopolitical urgency of energy security has brought the matter into sharp focus in the wake of President Vladimir Putin's invasion of Ukraine.

The EU imported around 155 billion cubic meters of gas from Russia last year, according to the IEA. Some 30 billion cubic meters could be replaced by other suppliers, while producing more power from nuclear and other sources -- and encouraging changes in consumption -- would also help reduce dependence on Moscow, it said.

The 10-point plan:
1. Do not sign any new gas supply contracts with Russia 2. Replace Russian supplies with gas from alternative sources 3. Introduce minimum gas-storage obligations 4. Accelerate the deployment of new wind and solar projects 5. Maximize power generation from bioenergy and nuclear 6. Enact short-term tax measures on windfall profits to shelter vulnerable electricity consumers from high prices 7. Speed up the replacement of gas boilers with heat pumps 8. Accelerate energy-efficiency improvements in buildings and industry 9. Encourage a temporary thermostat reduction of 1°C by consumers 10. Step up efforts to diversify and decarbonize sources of power-system flexibility

The 10-point plan:

1. Do not sign any new gas supply contracts with Russia

2. Replace Russian supplies with gas from alternative sources

3. Introduce minimum gas-storage obligations

4. Accelerate the deployment of new wind and solar projects

5. Maximize power generation from bioenergy and nuclear

6. Enact short-term tax measures on windfall profits to shelter vulnerable electricity consumers from high prices

7. Speed up the replacement of gas boilers with heat pumps

8. Accelerate energy-efficiency improvements in buildings and industry

9. Encourage a temporary thermostat reduction of 1°C by consumers

10. Step up efforts to diversify and decarbonize sources of power-system flexibility

European gas prices have soared to fresh records since Putin's invasion amid fears that supplies may suffer or even be cut off. The EU, which imports about 40% of its gas from Russia, is set to propose measures next week outlining how the bloc can wean itself off that supply. Under the plans seen by Bloomberg, it's pushing for minimum levels of gas storage ahead of next winter.

Moscow has given no indication it intends to cut off gas, but there's concern it could halt flows in retaliation for sanctions. EU Energy Commissioner Kadri Simson said this week that the bloc was preparing for such a scenario, and insisted it can “get through this winter safely” even as “risks remain.”

With Russia's war in Ukraine pushing many nations to reassess their sources of energy supply, industrial powerhouse Germany has said it could delay its exit from coal, while scaling up renewables and reviving plans to import liquefied natural gas. It even signaled it may soften its opposition to nuclear power, a shift supported by the IEA.

“It is useful for those countries that are retiring nuclear plants to take another look at the schedule,” the agency's Executive Director Fatih Birol said on Thursday. “There may be a merit to revisit those decisions.”

While not mentioned in the 10-point plan, coal-fired power could also play a role should the EU seek to reduce Russian gas imports even faster, according to the IEA. Yet there would be a risk to the bloc's climate targets, it said.