通过加速能源转型保障能源安全（英）

BuildingEnergySecurityThroughAcceleratedEnergyTransition

Version1.0

May2022

Insights

briefing

TheEnergyTransitionsCommission(ETC)isaglobalcoalitionofleadersfromacrosstheenergylandscapecommittedtoachievingnet-zeroemissionsbymid-century,inlinewiththeParisclimateobjectiveoflimitingglobalwarmingtowellbelow2°Candideallyto1.5°C.

OurCommissionerscomefromarangeoforganisations–energyproducers,energy-intensiveindustries,technologyproviders,financeplayersandenvironmentalNGOs–whichoperateacrossdevelopedanddevelopingcountriesandplaydifferentrolesintheenergytransition.Thisdiversityofviewpointsinformsourwork:ouranalysesaredevelopedwithasystemsperspectivethroughextensiveexchangeswithexpertsandpractitioners.TheETCischairedbyLordAdairTurner,whoworkswiththeETCteamledbyItaKettleborough(Director),andissupportedbyVice-ChairFaustineDelasalle.OurCommissionersarelistedonthenextpage.

BuildingenergysecuritythroughacceleratedenergytransitionwasdevelopedbytheCommissionerswiththesupportoftheETCSecretariat,providedbySYSTEMIQ.ThisreportconstitutesacollectiveviewoftheEnergyTransitionsCommission.MembersoftheETCendorsethegeneralthrustoftheargumentsmadeinthispublicationbutshouldnotbetakenasagreeingwitheveryfindingorrecommendation.TheinstitutionswithwhichtheCommissionersareaffiliatedhavenotbeenaskedtoformallyendorsethisbriefingpaper.

TheETCteamwouldliketothanktheETCmembers,memberexpertsandtheETC’sbroadernetworkofexternalexpertsfortheiractiveparticipationinthedevelopmentofthisinsightsbrief.

TheETCCommissionersnotonlyagreeontheimportanceofreachingnet-zerocarbonemissionsfromtheenergyandindustrialsystemsbymid-century,butalsoshareabroadvisionofhowthetransitioncanbeachieved.Thefactthatthisagreementispossiblebetweenleadersfromcompaniesandorganisationswithdifferentperspectivesonandinterestsintheenergysystemshouldgivedecisionmakersacrosstheworldconfidencethatitispossiblesimultaneouslytogrowtheglobaleconomyandtolimitglobalwarmingtowellbelow2°C.Manyofthekeyactionstoachievethesegoalsareclearandcanbepursuedwithoutdelay.

Learnmoreat:

/

company/energy

-

transitions-commission

/ETC_energy

ETCCommissioners

Mr.MarcoAlvera,

ChiefExecutiveOfficer–SNAM

Mr.ThomasThuneAnderson,

ChairmanoftheBoard–Ørsted

Mr.BradleyAndrews,

President–Worley

Mr.FrancescoCaio,

ChiefExecutiveOfficer–Saipem

Mr.SpencerDale,

GroupChiefEconomist–BP

Mr.AniDasgupta,

CEO&President–WRI

Mr.BradleyDavey,

ExecutiveVicePresident,CorporateBusinessOptimization–ArcelorMittal

Mr.Pierre-AndrédeChalendar,

ChairmanandChiefExecutiveOfficer

–SaintGobain

Mr.JeffDavies,

ChiefFinancialOfficer-Legal&GeneralCapital

Dr.VibhaDhawan,

Director-General,TheEnergyand

ResourcesInstitute

Mr.AgustinDelgado,

ChiefInnovationandSustainability

Officer–Iberdrola

Ms.MarisaDrew,

ChiefSustainabilityOfficer&GlobalHeadSustainabilityStrategy,AdvisoryandFinance–CreditSuisse

Mr.WillGardiner,

ChiefExecutiveOfficer–DRAX

Mr.PhilippHildebrand,

ViceChairman–Blackrock

Mr.JohnHolland-Kaye,

ChiefExecutiveOfficer–HeathrowAirport

MallikaIshwaran,

ChiefEconomist-Shell

Dr.TimothyJarratt,

ChiefofStaff–NationalGrid

Dr.ChristopherKaminker,

HeadofSustainableInvestmentResearchandStrategy–Lombard

Odier

Ms.ZoeKnight,

ManagingDirectorandGroupHeadoftheHSBCCentreofSustainable

Finance–HSBC

Mr.JulesKortenhorst,

ChiefExecutiveOfficer–Rocky

MountainInstitute

Mr.MarkLaabs,

ManagingDirector–ModernEnergy

Mr.MartinLindqvist,

ChiefExecutiveOfficerandPresident

–SSAB

Mr.AukeLont,

ChairoftheBoard–HEGRA

Mr.JohanLundén,

SVPHeadofProjectandProductStrategyOffice–VolvoGroup

Ms.LauraMason,

ChiefExecutiveOfficer,Legal&

GeneralCapital

Dr.MaríaMendiluce,

ChiefExecutiveOfficer–WeMeanBusiness

Mr.JonMoore,

ChiefExecutiveOfficer–

BloombergNEF

Mr.JulianMylchreest,

ManagingDirector,GlobalCo-HeadofNaturalResources(Energy,Power&Mining)–BankofAmerica

Ms.DamilolaOgunbiyi,

ChiefExecutiveOfficer–SustainableEnergyForAll

Mr.PaddyPadmanathan,

PresidentandCEO–ACWAPower

Ms.NanditaParshad,

ManagingDirector,Sustainable

InfrastructureGroup–EBRD

Mr.SanjivPaul,

VicePresidentSafetyHealthandSustainability–TataSteel

Mr.AlistairPhillips-Davies,

CEO–SSE

Mr.AndreasRegnell,

SeniorVicePresidentStrategicDevelopment–Vattenfall

Mr.MattiaRomani,

HeadofSustainability–AutonomyCapital

Mr.SiddharthSharma,

GroupChiefSustainabilityOfficer–TataSonsPrivateLimited

Mr.MahendraSinghi,

ManagingDirectorandCEO–DalmiaCement(Bharat)Limited

Mr.SumantSinha,

ChairmanandManagingDirector–

RenewPower

Mr.IanSimm,

FounderandChiefExecutiveOfficer–Impax

LordNicholasStern,

IGPatelProfessorofEconomicsand

Government-GranthamInstitute–LSE

Dr.GüntherThallinger,

MemberoftheBoardofManagement

–Allianz

Mr.SimonThompson,

Chairman–RioTinto

Dr.RobertTrezona,

HeadofCleantech–IPGroup

Mr.Jean-PascalTricoire,

ChairmanandChiefExecutiveOfficer

–SchneiderElectric

Ms.LaurenceTubiana,

ChiefExecutiveOfficer–EuropeanClimateFoundation

SenatorTimothyE.Wirth,

PresidentEmeritus–UnitedNationsFoundation

Ms.CathyZoi,

President–EVgo

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BuildingEnergySecurityThroughAcceleratedEnergyTransition

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Contents

Introduction5

1.Theimmediatecrisis–6

backgroundandshort-termoptions

2.

Themedium-termchallenge–

improvingenergysecuritywhileacceleratingenergytransition

11

2.1Clearlydesirableactions–reducingfossilfueldemand

17

2.2Diversifyingsourcesoffossilfuels–potentialtrade-offs

21

2.3Undesirableandunnecessaryactions

24

3.

Theimpactonconsumers-

reducingexposuretofossilfuelpricevolatility

25

4.

Theglobalpicture–

implicationsfortheenergytransition

28

5.Diversifyingsourcesoffossilfuels–30

potentialtrade-offs

4

BuildingEnergySecurityThroughAcceleratedEnergyTransition

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Introduction

TheinvasionofUkrainehascreatedanenergysupplycrisisforEurope.Inresponse,theEuropeanUnionisdevelopingplanstoreducerelianceonRussiangas,aswellasoilandcoal.ThisisdrivenbythedesirebothtoenhancesecurityofsupplyandtoreducetheflowofmoneytotheRussiangovernment.

TheEnergyTransitionCommission’sprimaryfocusisonthemedium-termstrategiesrequiredtobuildzerocarboneconomiesacrosstheworld,limitingclimatechangeascloseaspossibleto1.5°C.ButtheimmediatecrisismakesitimperativetoimproveEuropeanenergysecurityandtomanagetheimpactofhighgas,electricity,andfuelpricesonconsumersandbusinessesinEuropeandacrosstheworld.

•Intheshortrun(i.e.thenext12months)thismayinvolvesomeunavoidabletrade-offsversusclimateobjectives,aspolicymakersbalanceenergysecurity,consumerlivingstandardsandclimate

concerns.

•Butoverthemediumterm(2-8years)itisessentialtoaddressenergysecurityandconsumerlivingstandardconcernsinawaywhichdoesnotdelaybutratherandideallyacceleratestherequiredenergytransition.

Thatmedium-termchallengecanbemet:overallindeed,highandvolatilegasandoilpriceshaveimprovedthecostcompetitivenessofkeyzerocarbontechnologiesandremindedbusinesses,consumersandpolicymakersofthevulnerabilitycreatedbyafossilfueldependenteconomy.Buttheopportunitywillnotbeseizedwithoutclearstrategicdirectionandstrongpublicpolicies,whichmustreflectcarefulassessmentofsomeclimateversusenergysecuritytrade-offs.

ThisETCpolicybriefthereforecoversinturn:

1.Theimmediatecrisis–backgroundandshort-termpolicyoptions.

2.Themedium-termchallenge–improvingenergysecuritywhileacceleratingenergytransition.

3.Theimpactonconsumers–reducingexposuretofossilfuelpricevolatility.

4.Theglobalimpact–economicstressesandtheenergytransition.

5.Keyfutureissues–implicationsfortheETC’sworkprogramduring2022.

AseriesofETCinformationbriefs–listedonthefinalpageofthisdocument–providesupportingdetailondifferentaspectsofthechallengeandanalysisofthealternativepolicyoptions.

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1

Theimmediatecrisis–

backgroundandshort-termoptions

EvenbeforetheinvasionofUkraine,Europefacedsoaringgasandelectricityprices.Russia’sinvasionofUkrainehasgreatlyintensifiedthechallengebyshowinghowdangerouslydependentEuropeisonRussiangassupplies;importsfromRussiaaccountfor40%ofEuropeangasconsumption,25%ofoilconsumption,and30%ofhardcoalconsumption.1

Gasmeanwhileaccountsfor10%oftotalRussianexportsand8%offiscalrevenues,whileoilaccountsforastillmoreimportant50%oftotalexportsand37%offiscalrevenues.2InourInformationBriefon‘The2021/22gascrisis’wedescriberecentdevelopmentsintheglobalgasmarket,andEurope’spositionwithinit.3

1.Eurostat(Mar2022)TheEUimported58%ofitsenergyin2020.

2.a)Forevery1trnRoublefromgasintheRussianfederalbudget,thereare5trnRoublesfromoil,BNEF(Oct

2021)RussiaInsight:WhyPutinCanAffordtoSqueezeGasSupplies.

b)Revenuesfromoilandgas-relatedtaxesandexporttariffsaccountedfor45%ofRussia’sfederalbudgetinJanuary2022.IEA(April2022)FrequentlyAsked

QuestionsonEnergySecurity.

c)OilandGasmakeup60%of

Russianexportsin2019.BBC

(November2021)WillRussiaever

leavefossilfuelsbehind?

3.WhilstoilmakesupalargerpercentageofRussianexport

revenuethereisagreaterabilityto

shifttradeflowswithoilasoppose

togas,soRussiacanfindother

buyersandEuropecanfindother

sellers.Gasoffersamoresevere

energysecurityrisk,asmostof

Europe’simportsarelimitedby

pipecapacity,andtheLNGmarket

hasverytightsupplyanddemand

fundamentals.

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Twokeypointsarethat:

•GaspricesinEuropehadincreasedbymorethan250%overthe

yeartoFebruary2022,evenbeforetheinvasionofUkraine.OnefactorwasasignificantreductionintheflowofRussianimportsintoEuropeanmarketsforuseandstorageduringsummer2021,buttheincreasealsoreflectedmultipleothercoincidentaldevelopments,whichchangedtheglobalsupplyanddemandbalance.ThischangingbalancehadamajorimpactonEuropegivenitsincreasingdependenceonimportsofbothpipedgasfromRussiaandLNGimportsfromothercountries.

•Theincreaseinthecostofgashasledtodramaticincreasesinthecostofelectricity,exacerbatingtheimpactonhouseholdbudgets.Thisreflectspowermarketdesignsinwhichincreasesinshort-termmarginalcostfeedthroughtopervasiveincreasesinthemarketpriceofelectricity.4

InresponsetoRussia’sinvasion,actionbyEUMemberStatesandothercountrieshascontinuedtoevolve.ThekeyinitialEUresponsewasaplantoreduceEurope’simportsofRussiangasbytwothirdswithinoneyear,5whiletheInternationalEnergyAgencyhasalsopublisheda“10-pointplan”toreduceRussianimportsbybetween48and66percent(Exhibit1).6ThedetailsoftheseandotherinitialplansarediscussedintheInformationBriefon‘HowfarcanEuropereduceuseofRussiangasthisyear?’whichoutlinesactionsinthreebroadcategoriesofalternativegassupply,alternativeelectricitysupply,anddemandreduction.

ThekeydifferencesbetweentheIEAandEUestimateslieinthefollowingcategories:

•IncreasedLNGimports,wheretheEUassumesthatallexistingtechnicalcapacitycouldbeutilized,theIEAassumesthatimportswillalsobelimitedbyhighprices,givencompetingdemandsfromotherLNGusersparticularlyinAsia.

•Acceleratedrenewableenergydevelopment,whereshorttermpotentialisconstrainedbylimitstothespeedatwhichprojectscanbecompleted,butwheretheEUmakesmoreambitiousassumptionsthantheIEA.

•Nuclearplantcontinuation,wheretheIEAassumesthattheEUcandelay/canceltheclosureofsomeexistingnuclearplants,anoptionexcludedfromEUanalysis.

•Increasedcoalplantoperations,whichtheIEAconsidersasapossiblebutundesirableupsidetoitsbasecaseestimate.

BuildingEnergySecurityThroughAcceleratedEnergyTransition

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4.Itisthegeneralfeatureofmarketsthattheysetpricesatthemarginbutthecrucialdistinguishingfeatureofenergyisthatitisnotpossibletosubstituteanditrepresentsasignificantshareoftotalhouseholdbudgets,inparticularforlowerincomehouseholds.

5.REPowerEUwillbeformallyapprovedattheendofMayandtheremaybesomematerialchanges,includingthelikelyaimtophaseoutRussiangasby2027atthelatest.EuropeanCommission(March2022)REPowerEU.

6.IEA(March2022)A10-PointPlantoReducetheEuropeanUnion’sRelianceonRussianNaturalGas.

7

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TheactionsidentifiedprimarilyseektoreduceRussiangasimportsbyincreasingalternativesourcesofenergysupply,butboththeIEAandtheEUalsoassumearolefordemandreductionvia,forinstance,turningdownresidentialheatingthermostatsby1°C.

TheETCbelievesthatalloftheoptionsintheIEAbasecaseshouldbepursued.7Inadditionwebelievedemandreductionactionsarepreferabletorunningcoalplantsmore,giventhehigheremissionswhichthelatterwouldproduceandtheadverseimpactonEurope’scredibilityinglobalclimatenegotiations.Weestimatearound50%reductioninimportsfromRussiaisfeasiblewithinoneyearwithoutsignificantincreasesincoalburnandwithoutadditionaldemandreductionsbeyondthemodestactionsincludedintheIEAandEUscenarios(Exhibit2).

Buta50%reductionwouldstillleaveEuropesignificantlydependentonRussiangasforseveralyears,withtwotroublingimplications.FirstitwillmakeEuropemorevulnerabletoanyRussianactiontocutoffgassupplies:seconditwouldcontinuetoprovideRussiawithlargefinancialflowswithwhichtosupportmilitaryaggression.

TheonlyfeasiblewaytoavoidthisistoencourageorrequiremoresignificantreductionsingasdemandthanincludedinIEAandEUscenarios.Thesecouldentailencouragingorrequiringresidentialorcommercialcustomerstoreducethermostatsfurther,closureofofficesonspecificdayscombinedwithworkingfromhomewherepossible,rationingofgassuppliesforindustrialuse,andtemporarilyslowingdowntheclosureofcoalpowerplants.ThesemeasuresasoutlinedinExhibit2couldreduceRussianimportsbyanadditional25%,8butwouldhaveanappreciablebutstillmodestimpactoneconomicoutput(estimatesforGermanysuggestaGDPdeclineofabout2.2%)9.Howeverifcombinedwithdirectincomesupportforlowerincomepeoplecoulddeliveramoreefficientandequitableoutcomethaneither:

•Relyingsolelyonhighpricestocurtaildemand,whichhasseverelyadverseeconomicanddistributionalconsequences.

•Offsettingtheimpactofhighwholesalegaspricesviataxreductions,subsidiesorpricecapswhichreducethecost(andinsomecasesthemarginalprice)ofgasorelectricitytoendconsumers.Incomesupportdeliveredinthisform,ratherthanviadirectincometransferstopoorerhouseholds,underminesincentivesforenergyefficiencyanddemandreduction,andprovidesaneffectivefinancialsubsidytotheRussiangovernment.

7.Inadditiontheremaybemoreopportunitiestoexpandpipedimports,forinstancesincountriesthatareflaringgaswhichcouldbeotherwiseused.ThisisreflectedintheupperrangeofpipedimportsinExhibit2.SeeestimatesfromCapterio(2022)NorthAfricacanreduceEurope’sdependenceonRussiangasbytransportationwastedgasthroughexistinginfrastructureandAuroraEnergyResearch(2022)ImpactofRussia-

UkrainewaronEuropeangasmarkets:canEuropecopewithoutRussiangas?

8.Furthercurtailmentstothermostattemperaturesandindustrialgasconsumptioncouldreplacetheremaining25%ofRussiangasimports,butthesearelikelytohavealargerimpactonstandardsoflivingandeconomicoutput.

9.VOXEU,CEPR(2022)WhatifGermanyiscutofffromRussianEnergy?

Exhibit1

Gassupply

Electricitysupply

Demand

Lever

RampupLNGimportswithinexistingterminalcapacityconstraints

RampupdomesticEUgasproduction,plusmorepipelineimports

Increasedproductionofbiomethanefrom

agriculturalwastesandresidues

IncreasedoutputfromexistingEUbioenergypowerplants

Acceleratethedevelopmentofnewwindandsolarprojects

Maximisenucleargeneration

Turndownthermostatsby1°C

Accelerateenergyefficiencyimprovementsinbuildingsandindustry

Increaseheatpumpinstallation

Totalgasdisplaced

Givennaturallylowerresidentialandcommercialgasdemandduringthesummermonths,someoftheseactionsmaynotbeessentialorhaveamajorimpactuntilautumn.Indeedlowerdemandisalreadyfeedingthroughtodecreasesintheveryshort-termpriceofgas,evenwhilelongertermpricesinthefuturesmarketstayhigh(Exhibit5).ItisthereforeessentialtousetheperiodoflowdemandtoincreasegasstorageinlinewiththeEU’sstatedobjective.10Andfurtheractionondemandreductionwouldmakeitpossibletomaximisetheincreaseinstoragelevelsachieved.

EuropeisalsoseekingtoeliminateimportsofRussianoil:Germanyhascommittedtoachievethisbytheendof2022.Sincetheglobalmarketislessregionallysegmentedthangas,itwillbeeasierforEuropetoreplaceRussianoilwithimportsfromothercountries;butthatalsomeansthatanembargowillhavelessimpactontheRussianeconomy,sinceitwillbeeasierforRussiatodivertoilexportstoothermarkets.TheonlywaytoreduceRussianoilexportsintotal,andtoatleastmarginallyreduceoilprices,isthereforetoreduceoildemand.Givenlimitstothepotentialpaceofstructuralchanges(e.g.viaacceleratedpenetrationofEVs)thiswouldrequiremeasuressuchasreducedroadspeedlimitsormeasureswhichachievemodalshiftsviaforinstance,increasedhomeworking,betterinfrastructureforbikesandmicroscooters,car-freeSundaysandsubsidiesforpublictransport.11

10.TheEuropeanCommissionisintendingtointroduceamandatethatgasstoragecapacitiesintheEUbefilledto80%capacitybythebeginningofNovemberthisyear,aheadoftheWinterheating

season.EuropeanCommission(May2022)Memberstatesagreeonnegotiatingmandateforgasstorageproposal.

11.TheIEA,inits10-pointplan

tocutoiluse,suggeststhatreducingspeedlimitsonhighwaysby10kmphandincreasedworking-from-homeinadvancedeconomiesreduceoildemandby0.4mbpdeach.

Recentassessmentssuggestbetween720(48%)and1000TWh(66%)ofRussiangascouldbereplacedoverthenextyear

TWhofGasdisplacedin1year

EuropeanCommission

490

100

35

90

220

35

100

40

20

720

15

1000

IEA

195

100

100

160

20

-

-

-

NOTE:100TWhofrenewableelectricitysupplywasexpectedtobeaddedthisyear.Additionalpotentialbeyondthisrepresentsopportunityforacceleratedrenewableadditions.

SOURCE:IEA(March2022)A10-PointPlantoReducetheEuropeanUnion’sRelianceonRussianNaturalGas;EuropeanCommission(March2022)REPowerEU.

BuildingEnergySecurityThroughAcceleratedEnergyTransition

May2022

9

Exhibit2

ETCsummaryassessmentofimpactofshorttermactionsover1year

ETCassessmentoffeasiblelevelofEuropeanRussiangasimportswhichcanbedisplacedwithin1year

TWhofgasdisplaced

02004006008001000

1200

GassupplyactionsElectricitysupplyactionsDemandreductionactionsTrickytrade-offs

Rationale

LimitedbySpain-France

interconnectorandAsian

competition

FrominsideEU

andnon-Russian

pipedimports

DoublingofFF55

biomethane

ambition

Utilising50%excess

bioenergypower

generationcapacity

15TWhofrooftopsolarand20TWhofutilityscalewindandsolar

Returningreactorsto

operationfrom2021

maintenance

Consensusofestimates

(residentialand

commercial)

Increase

renovationrates

ofbuildingstock

Mid-pointof

estimates

Action

RampupLNGimportswithinexistinginfrastrucutre

Rampupdomestic

productionplus

pipedimports

Increased

productionof

biomethane

Increasedoutput

frombioenergy

powerplants

Acceleratedevelopment

ofnewwindandsolar

projects

Maximise

nuclear

generation

Turndown

thermostats

by1°C

Accelerateenergy

efficiency

improvements

Increaseheatpumpinstallation

245

195-490

100

100-300

20-35

20

45

45-90

1110

110-220

.

10-20

15

.

200

75%of2021Russianimports

740

50%of2021Russianimports

C

C

160

35

35-150

100

20

20-40

70

100

100-145

Limitedbyincreasedcoalthatmustbesourced(~13Mt)

Around10%ofindustrialdemand

Consensusofestimates

(residentialand

commercial)

Russianimportsdisplacedwithnoclimatetrade-off

Keepcoalpowerunits

onlineandrevertrecently

retiredcapacities

Fuelswitchingand

reductionofsupply

toindustry

Turndown

thermostatsbyan

additional2°C.

TotalRussian

importsdisplaced

RangeofestimatesETCbestestimateassessment,assumingstrongpolicyscenario

SOURCE:IEA(March2022)A10-PointPlantoReducetheEuropeanUnion'sRelianceonRussianNaturalGas;EuropeanCommission(March2022)REPowerEU;Aurora(March2022)ImpactofRussia-UkrainewaronEuropeangasmarkets:canEuropecopewithoutRussiangas?

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2

Themedium-termchallenge–

improvingenergysecuritywhileacceleratingenergytransition

TheEUhassettheformalobjectiveof

entirelyeliminatingrelianceonRussiangasby203012andhaspublishedanindicativeplanforachievingthis(Exhibit3).SubsequentlyGermanyhassetatargetofeliminatingRussiangasimportsby2025,andseveralEuropeancountriesarealsoarguingforearlyprohibitionofalloilimportsfromRussia.TheUKhasalreadydeclaredthatitwillbanRussianoilimportsfromtheendof2022andtheUK’splansfortheSixthCarbonBudgetanticipatereductioningasuseinelectricityby25%by2030,andthecompleteeliminationofunabatedgasby2035.13

Thecrucialquestionishowtomeettheseenergysecurityobjectiveswhilenotdelayingbutacceleratingtheenergytransition.Overthemediumtermthiswin-wincanbeachieved,butsomepotentialtrade-offsintheearlyyearsmayneedtobefacedtoaligntheresponsetoboththeenergyandclimatecrises.

12.Recentproposalshavesuggestedincreasingthisambitionto2027.

13.CCC(2020)TheSixthCarbonBudget.

Exhibit3

EUplansinFitfor55andadditionalactionsannouncedinREPowerEUplantoeliminateRussiangasimportsby2030

EUgasconsumption,2019and2030forecast

TWh

EUproduction

Russia

650

Ø4550

1150

Reductionsinnaturalgasthrough

increasedbiomethane,hydrogen

andenergyefficiency

750

1800

OtherLNG

750

Otherpiped

UK

Norway

100

1000

ImplementationofFitfor55by2030

2650

650

Extra-EUexports

-400

Additionalactions

inREpowerEU

Gasdemand

remainingin2030

2019

2030

NOTE:Exclnqe2gc本!ou2!u匕EboMeLEn本pg本!ucLeg2e2nbbl入oLug本nLglag2.

SOURCE:2人2lEWIOcglcnlg本!ou2LoL本peElCpg2eqouEnLo2本g本(s0ss)Naturalgasimportsbycountryoforigin:EnLobeguCo山山!22!ou(s0ss)REPowerEU:EnLobeguCo山山!22!ou(s0Jo)Fitfor55.

Twoconsiderationssetthecontextforpolicychoiceandprivate

investmentdecisions:

•Timescalesforimpact.Thefirstistherelativepaceatwhichalternativetechnologiescanbedeployed.Exhibit4setsoutanassessmentofrequiredtimelinesforsignificantimpactbytechnology,andofthepotentialtoreduceexistingtimelinesviastrongpolicyaction.Somekeypointsare:

–Thefeasiblepaceoframpupforrenewableelectricityvariesbyspecifictechnologybutwithin5yearsforcefulpolicycouldproduceaverysignificantaccelerationinREdeployment,includingforthedevelopmentofgreenhydrogensupply.

–Energyefficiencyimprovements(inparticularbetterinsulationandincreaseduseofheatpumps)couldalsoproduceamajorimpactwithin5years,butonlywithforcefulpoliciestocreateincentivesorrequirementsfordeploymentandtodrivethedevelopmentofsupplychains.

–BuildingnewLNGinfrastructure–i.e.liquefactionplantsinexportingcountriesandregasificationplantsinEurope–requiresasignificantleadtimeandwillonlyoccurifunderpinnedbylongtermcontracts,butcouldverysignificantlyreplaceRussiangas

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BuildingEnergySecurityThroughAcceleratedEnergyTransition

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within4-5years.HowevernotingthatanynewLNGinfrastructurecomeswithbothcarbonlock-inandstrandedassetrisk.

–Postponingtheclosureofexistingnuclearplantscouldhaveasignificantmedium-termimpact,bu