REPowerEU mobilises €300bn to end Russian gas dependence
“When Europe acts together, it has more clout.” So said European Commission president Ursula von der Leyen in a press briefing today about the urgent need to end Europe’s dependence on Russian gas while simultaneously ensuring energy security.
“Putin’s war is heavily disrupting the global energy market. It shows on one hand how dependent we are on imported fossil fuel, but it also shows how vulnerable we are on relying on Russia for importing our fossil fuels…Therefore we must now reduce, as soon as possible, our dependency on Russian fossil fuels”.
Von der Leyen made this statement while announcing the mobilising of REPowerEU, a package designed to drive the phasing out of Russian fossil fuels. “We are going in the right direction, but we need to accelerate,” said von der Leyen.
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The package will mobilise up to €300 billion ($315 billion) to ensure investments are directed into three main pillars:
- Demand-side: Increasing the EU efficiency target for 2030 from 9% to 13%.
- Supply-side: Diversifying away from Russia to other reliable suppliers. A platform has been established for the joint purchase of gas, LNG, and hydrogen. Also, a mechanism for joint procurement and joint outreach to supplying countries will help secure the needed energy imports without the competition between member states.
- Accelerating investment in renewables: Increasing the 2030 target from 40% to 45% renewable energy.
The €300 billion will be made available through grants, as well as €225 billion ($237 billion) in loans, €10 billion ($10.5 billion) for LNG, and €2 billion ($2.1 billion) to develop oil infrastructure to stop the shipment of Russian oil.
Von der Leyen added that several key actions will be put in place to support this package and speed up the energy transition, such as speeding up permitting procedures for renewables.
“The foundation is already in place through the European Green Deal and Fit for 55… but we need to take it to another level to become independent as soon as possible.
“REPowerEU will help us save energy, phase out fossil fuel and kickstart investment on a new scale – [it’s the] speed charging of our EU Green Deal,” added Von der Leyen.
Commenting on the announcement, Ignacio Galán, CEO and chairman of Iberdrola, said: “…REPowerEU is a set of progressive proposals that will help Europe to accelerate this path by boosting investments in renewables, networks, storage and green hydrogen. This will also increase self-sufficiency, improve our competitiveness and create industrial development and jobs all over Europe.
“Increasing the 2030 EU share of renewable energy from 40% to 45% is a bold but achievable step, and the promise to speed up permitting procedures for renewables and grids is both welcome and necessary.
“The private sector is already doing its part, and we stand ready to make this plan a reality as quickly as member states can translate the proposals into clear policies backed by stable regulation across the EU.“
Sushil Purohit, president, Wärtsilä Energy and EVP at Wärtsilä Corporation, commented: “We need to accelerate the decarbonisation of power systems in Europe and increase energy independence…We are pleased to see that the European Commission has increased its renewable target from 40% to 45% by 2030 as part of the REPowerEU plan. However, a renewable power system requires a significant increase in flexibility to support the transition and increase energy security for the whole of Europe.”
Diego Pavia, CEO of EIT InnoEnergy, stated: “EIT InnoEnergy welcomes the new 45% renewable energy sources target and measures to lift deployment bottlenecks such as permitting announced in REPowerEU documents today. For years now, renewables have been a cheaper form of energy than traditional fossil fuels and that’s only been possible thanks to strong investment in new, innovative technologies. Deploying renewables and upscaling energy storage must go hand in hand with increased manufacturing capacity…
“But investment alone won’t solve the energy trilemma we’ve been grappling with for years – with energy security rising back up the agenda in recent months. We need to foster an environment where innovations can cross borders in Europe and ideas transcend businesses to support the economic prosperity of the region.
“In light of that, it’s fantastic to see the creation of a European Solar Industry Alliance, building upon the dynamic of the European Solar Initiative. We stand ready to continue the work, with the success of the European Battery Alliance and European Green Hydrogen Acceleration Centre as a blueprint.”
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