The European Union is taking drastic steps to ensure that its energy supply will be enough to get it through what looks to be a difficult winter. The EU energy ministers met recently in Brussels to discuss a plan for every EU country to voluntarily cut 15 per cent of their natural gas consumption between now and 2023 spring to avoid a more pronounced energy crisis. Russia, for its part, has been playing with the bloc, slashing the amount of gas it provides to Germany for questionable reasons. The fact of the matter remains, every bit of trade the bloc does with Russia, the more power Russia has, and the more money it has to finance its attrition-based war with Ukraine.
The EU’s proposal to cut fuel use across the bloc would mean that every EU nation could survive even in a world where Russia completely shuts down oil and gas exports. Thus, if the EU sticks together, they should be able to survive a long winter without too much economic distress. For many, it has been clear from the get-go that part of Putin’s plan with the invasion of Ukraine has been to divide the EU. Because the EU economy is so highly integrated, a painful strike against one member state would result in fallout for the rest of the bloc. But not all countries have the same exposure to Russia’s gas games as others. Germany, traditionally the strongest economy in the EU, is one of the countries that relies most on Russian gas. Overall, Russian gas provides 40 per cent of EU consumption, and is flowing at about 30% of its normal levels. For Germany, that number was 20%. Perhaps most importantly, the facilities that store gas, which are typically full by this point in preparation for winter, are not stocked as they should be because of volatile supplies and shortages.
Agreed, with exceptions
Despite understandable calls for solidarity, some EU states are not so happy about the required 15% cuts. Spain and Portugal have been especially vocal against the cutbacks, since they have invested so heavily across decades to make themselves less reliant on Russian gas. But despite their misgivings, member states agreed to reduce their gas demand by 15% compared to their average consumption in the past five years, between 1 August 2022 and 31 March 2023. Each country has been given autonomy in how they implement these measures to reduce consumption, but the key is to reduce. Spain, for example, is requiring thermostats in public buildings not to be set below 27 degrees.
In the final agreement, there were some concessions to states that are less reliant on Russian gas. The EU council agreed that member states that are not interconnected to other member states’ gas networks are exempted from mandatory gas reductions as they would not be able to free up significant volumes of pipeline gas to the benefit of other member states. Member states whose electricity grids are not synchronised with the European electricity system and are heavily reliant on gas for electricity production are also exempted, in order to avoid the risk of an electricity supply crisis.
When choosing demand reduction measures, member states agreed they should prioritise measures that do not affect protected customers such as households and essential services for the functioning of society like critical entities, healthcare, and defence. Possible measures include reducing gas consumed in the electricity sector, measures to encourage fuel switch in industry, national awareness raising campaigns, targeted obligations to reduce heating and cooling and market-based measures such as auctioning between companies.