Russia declares gas war on EU – POLITICO

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Russian President Vladimir Putin is playing tough with the European Union, cutting off gas deliveries to some of Russia’s best customers in a howl of rage over sanctions imposed after invading Ukraine.

It is putting enormous political pressure on governments, threatening to freeze Europeans if this winter is cold and potentially undermining the bloc’s climate goals as countries replace gas power with coal. It could even push the continent into a recession.

Simone Tagliapietra, analyst at the Bruegel think tank, calls Russia’s policies “energy blackmail.”

Only 40 percent of the normal amount of gas flows along Russia’s Nord Stream subsea pipeline to Germany, which is affecting deliveries to France, Italy and Austria, as well as Germany. Russia’s gas export monopoly Gazprom has already halted all deliveries to Poland, Bulgaria, the Netherlands, Finland and Denmark after energy companies in those countries refused to bow to Kremlin demands to pay for deliveries. in rubles.

In response, some countries are planning to fire up coal-fired power plants.

“It must be recognized that Putin is reducing the supply of gas to Europe little by little, also to drive up the price, and we must respond with our measures,” German Economy and Climate Minister Robert Habeck said on a television program. . interview on Sunday night, adding that “it is a tense and serious situation.”

Austria plans to cover up a closed power plant to return to burning coal.

Poland aims to subsidize coal used for home heating.

The Netherlands decided on Monday to scrap earlier plans to limit output from its four coal-fired power plants.

“If these weren’t special times, we would never do this,” said Climate Minister Rob Jetten.

Italy’s government is planning a crisis meeting on Tuesday and Prime Minister Mario Draghi has ordered two liquefied natural gas regasification units and has been talking with countries including Qatar, Angola and Algeria to sign gas supply deals in a desperate bid. for securing supplies in the event of a Russian closure.

Brussels wants to project confidence, but the concern is clear.

“We take the situation we find ourselves in very seriously. But we are prepared,” European Commission President Ursula von der Leyen said in a meeting with journalists on Monday. “We are in difficult times. Times are not getting easier,” she added.

dirty deals

The rush to burn coal to secure energy supplies is symbolically uncomfortable for climate-conscious Europeans. But few expect it to divert the EU or its member states from their efforts to reduce greenhouse gas emissions.

In Germany, officials insist the return of coal will be short-lived and will not jeopardize the country’s path to zero coal power by 2030. The coal will act as a backup supply for the power sector, which will allow the country to build up its gas reserves before winter. Meanwhile, the government plans to rapidly ramp up clean energy.

The Neurath coal power plant in Germany | Andreas Rentz/Getty Images

The Russian invasion has hardened political support for renewable energy in Germany, said Simon Müller, director of the Agora Energiewende think tank.

“This added layer of urgency that we have now in the face of this situation helps provide the political momentum that we need for some very important accelerations in renewable construction,” Müller said. The German parliament is considering 10 energy efficiency and renewable energy measures, and Müller said the three-party coalition was broadly aligned on the importance of removing barriers to green energy.

The green groups were also sanguine. “There is no plan in Germany at the moment to cast doubt on the exit date for coal,” said Christoph Bals, policy director at the NGO Germanwatch.

But the need to quickly turn around coal scrapping is adding to political tensions.

In Berlin, the conservative opposition criticized Habeck for allowing an increase in coal use and ruling out keeping Germany’s three remaining nuclear power plants in operation beyond the end of this year.

“I don’t understand why the Greens’ climate minister prefers to let more coal plants run longer, rather than carbon-neutral nuclear power plants,” said Jens Spahn, deputy leader of the Christian Democrats in parliament. saying German television on Monday. The nuclear shutdown policy was adopted by the former leader of her party, Angela Merkel.

Politics is also causing stress within the ruling coalition.

“What is necessary is to keep the remaining three nuclear power plants in operation for longer,” said Bijan Djir-Sarai, general secretary of the liberal Free Democrats. “This is a fact that the economy minister cannot simply ignore.”

Habeck admitted the step was “breaking a taboo”, said coal was still better than reviving atomic power, arguing that a change in nuclear policy would only have an impact late next year, too late to help this winter. He was backed by Foreign Minister Olaf Scholz, who said in a interview published on Monday that “nuclear power will not help us now, not in the next two years, which is what matters.”

Political leaders are calling on their people to save energy and reduce gas use, while governments work to increase storage levels to enable the continent to weather a Russian gas cut through the winter. As a last resort, they are considering rationing gasoline.

An interruption in gas supply would almost certainly send the bloc into a recession. The European Central Bank warned that the eurozone would contract 1.7 percent next year if Russia turned off the tap entirely.

“Disruptions in energy supply and little chance of an immediate substitution of gas supplies from Russia will likely require some rationing and reallocation of resources, resulting in production cuts in the euro area, particularly in intensive sectors. in energy,” the bank said. forecasting that if that were to happen, the bloc’s economy would rebound next year.

But the ECB also had a word of warning for Putin.

“With regard to the Russian economy, the scenario presents a severe recession with a contraction in output similar to the contraction experienced when the Soviet Union collapsed.”

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