Attempt to ‘blackmail’ Europe using energy ‘abject failure’
EU has freed itself from Russian energy dependence
European gas prices lower than before Ukraine invasion
Russian President Vladimir Putin “has already lost the energy war he started” and attempts to hold Europe to ransom over energy have failed, European Commission President Ursula von der Leyen said Feb. 15.
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Speaking at the European Parliament, von der Leyen said the EU had repositioned itself and freed itself from dependence on Russian energy.
“Putin assumed that our support for Ukraine would not last. He thought it would be easy to hold Europe to ransom, because of our dependence on Russian oil and gas. But he was wrong,” von der Leyen said.
“Today, one year after the war began, he has already lost the energy war he started,” she said, pointing to lower Russian income from sales of gas to Europe and reduced gas prices.
“Russia’s income from sales of gas to Europe has shrunk by two-thirds. The oil price cap means that Russia is losing Eur160 million in revenue every day,” she said.
“Gas prices in Europe are lower today than before Russia’s invasion of Ukraine, and Europe is now investing in clean energies and energy independence as never before,” she said.
Russia gradually choked gas supplies to Europe through 2022, helping push prices to record levels.
Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at an all-time high of Eur319.98/MWh in late August.
But prices are now significantly lower on the back of healthy storage and demand curtailments with Platts assessing the TTF month-ahead price on Feb. 14 at Eur52.80/MWh.
Von der Leyen said European unity and a “smart” energy policy meant the EU had been able to withstand Russian pressure.
“Our economy today is performing significantly better than forecast,” she said. “Putin’s attempt to blackmail Europe using energy has been an abject failure.”
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Joint purchasing
EC Vice President Maros Sefcovic, speaking in Washington late Feb. 14, said the EU had had to adapt and diversify “fast” given its previous overdependence on Russian fossil fuels.
“We reduced our energy consumption — with gas savings of 20% — and turned to alternative gas suppliers,” he said.
EU member states agreed in July to a 15% voluntary gas demand reduction between August 2022 and March 2023 compared with their average consumption over the past five years, but many saved more gas than expected.
In the period August-November 2022, EU consumption was 20.1% lower than average for the same period from 2017-2021, EU statistics agency Eurostat said in late December.
Sefcovic said, however, that finding alternative gas suppliers to replace Russia had come “with a price tag”.
“And that is why for the first time ever, the EU is making plans to jointly buy gas, pulling its political and economic weight,” he said.
The EU hopes to have its joint purchasing tool “up and running” by April, he said, for the benefit not only of the EU, but also Ukraine and Moldova.
EU member states and Energy Community contracting parties plan to use the procurement tool to aggregate demand for volumes of gas equivalent to 15% of their respective gas storage filling obligations for 2023.
Talks have been ongoing in recent weeks with European gas buyers on aggregating demand before tenders go out to suppliers.
The EC has said it intends to conclude its first joint purchasing — including through long-term contracts — with gas suppliers “well before next summer.”
