This dataset is part of Bruegel’s work on how European Union governments (plus the United Kingdom) have responded to the ongoing energy crisis. It has been compiled alongside the Bruegel dataset on National fiscal policy responses to the energy crisis. Any recommendations or additional data sources are greatly appreciated and can be sent to [email protected]. For press requests, contact [email protected].
The latest update was made on the 15 December 2022.
- New natural gas deals and political commitments struck by European countries with various suppliers around the world since Russia’s invasion of Ukraine amount to new contracted supply of 7 billion cubic metres (bcm) in 2022, 10.8 bcm in 2023 and 47 bcm in the next few years. However, much of the extra 50 bcm LNG import volumes agreed between the US and the EU is not included in the above estimates. If national plans to increase domestic production are included, an additional 1 bcm in 2022, 1.5 bcm from 2023 and 4.8 bcm from 2024 can be estimated.
- New gas infrastructure investment have led to new capacity coming online of 20 bcm in 2022 (of which 10 bcm is from new LNG capacity and 10 bcm from the Baltic Pipe between Norway and Poland) and approximately 51 bcm in 2023 (including 44 bcm from FSRUs). Approximately 17 bcm/year is then expected to come online in 2024, 34 bcm/year in 2025, 35 bcm/year in 2026, 13 bcm/year in 2027 and 6 bcm/year in 2028. Countries are also opening and building new gas interconnectors, with almost 16 bcm/year of new cross-country capacity coming online in 2022 and 5 bcm/year from 2025.
- Coal use in EU electricity generation increased year-on-year (YoY) to more than 32 TWh in the first ten months of 2022. However, little to no gas-to-coal switching took place, partly because of increased gas demand following reduced hydropower energy production in Italy and Spain (-25 TWh YoY) and low nuclear power production in France (-69 TWh YoY).
- The postponement of the closure of two nuclear reactors in Belgium (Tihange 3 and Doel 4) and three in Germany (Neckarwestheim 2, Emsland and Isar 2) could lead to potential gas savings of approximately 8 bcm/year.
- On 26 July 2022, EU countries agreed on a voluntary natural gas demand reduction of 15% between 1 August 2022 and 31 March 2023, compared to average consumption in the previous five years. Exemptions from the target include Cyprus, Ireland, Malta, Estonia, Latvia and Lithuania. Derogations for other countries are likely to follow after assessments by the European Commission. On 30 September 2022, EU countries agreed to an electricity demand-reduction target of -10% overall (voluntary) and -5% during peak hours (mandatory).
- With REPowerEU, the European Commission proposed to increase by 13% the energy savings target for 2030. This requires EU countries to accelerate their implementation of measures that likely started already in line with post-pandemic national recovery plans. REPowerEU’s goal is to replace 21 bcm/year of gas by wind and solar energy. EU countries have accelerated the roll-out of renewables, in particular by setting up investment schemes in renewable energy projects, storage and renewable heat (including heat pumps), by easing rules related to renewables deployment and by simplifying tender procedures to speed up often long permitting processes.
Russia’s invasion of Ukraine has triggered a quick and profound reorientation of energy policy in Europe. The aim is to decouple Europe from Russian fossil fuels, while accelerating the green transition. Russia cut about 80% of its gas supplies to Europe during spring and summer 2022, making the reorientation increasingly urgent. The European Union has sought to define the direction and speed of this restructuring of energy policy reshape through the REPowerEU strategy. However, crucial energy policy decisions have been taken by EU countries at national level.
Consistent with REPowerEU, these national decisions can be classified as either short term or longer term.
Short-term policies include unprecedented measures to diversify gas supply. Several European countries have new gas deals with alternative suppliers of both liquified natural gas (LNG) and pipeline gas, and have started on the construction of new gas infrastructure, including LNG plants and floating storage and regasification units (FSRUs). Short-term policies have also included policies to foster gas-to-coal switching in power generation, postponement of nuclear power plant closures and gas consumption reduction measures.
Longer-term policies have mainly focused on accelerating the green transition, which is seen as a structural response to fix Europe’s over-dependency on fossil-fuel imports. A wide range of longer-term energy policy measures have been announced, from the fast-tracking of renewable energy projects to accelerated roll-out of clean-tech solutions including heat pumps and electric mobility.
This dataset organises energy policy measures taken by European governments (EU and the UK) into four main categories: (1) gas supply diversification; (2) short-term alternative energy sources; (3) energy savings and energy efficiency; and (4) accelerating the roll-out of renewable energies and clean-tech solutions. This dataset will be updated regularly.
Table of contents
Policies for gas supply diversification
Gas supply deals
Gas import infrastructure developments
Policies to tap into short-term alternative energy sources
Nuclear closure postponements and investment accelerations
Policies to foster energy savings and energy efficiency
Policies for energy savings
Policies for energy efficiency
Policies to accelerate the roll-out of renewable energies and clean tech solutions
1. Policies for gas supply diversification
1.1. Gas supply deals
EU countries have ramped-up imports of liquefied natural gas (LNG) to replace the large gas volumes rapidly being cut-off by Russia and rushed to strike deals with other gas exporting countries to secure volumes in the longer term. In this section, we keep track of the most prominent deals reached since September 2021.
- (Azerbaijan): The government has a contract for 1bcm/ year of gas from Azerbaijan and has proposed (alongside operators from Romania, Hungary and Slovakia) to increase the volume by 0.5-1 bcm/year following the suspension of Russian gas flows.
- (United States): in May, Bulgargaz, Bulgaria's state-owned gas company, purchased two LNG tankers from Cheniere, reportedly with the support of the US government. Bulgargaz received one tanker in October by the volume of 62 million cubic meters, with the help of the Turkish government in securing LNG terminal capacity. In July 2022, the Bulgarian company Overgas signed a memorandum of understanding with US firm Excelerate Energy to import LNG through the Vlora terminal in Albania.
France's Total Energies operates the largest oil and gas field in the North Sea – Tyra – and expects to restart production in the field by winter 2023-2024. The field should provide up to 2.8 bcm/year, amounting to 80% of the country’s production.
Eesti Gaas signed a €300-million-deal with Equinor for the purchase of 2 TWh of LNG delivered through Lithuania's Klaipeda LNG terminal in October and November 2022.
On 2 May 2022 the US LNG provider NextDecade Corporation announced a 15-year sale and purchase agreement (SPA) with ENGIE for the supply of LNG from NextDecade’s Rio Grande LNG export project in Brownsville, Texas. Under the agreement, ENGIE will purchase 2.4 bcm/y of LNG on a free-on-board basis. The plant’s first unit could start commercial operations as soon as 2026. In December 2022, another LNG US conglomerate - Sempra Infrastructure - signed a SPA with Engie for the first phase of its Port Arthur LNG project near Houston. The agreement secures offtake for the project and includes a commitment by Sempra to source supplies from other. The agreed volumes are of 1.2 bcm/y starting in 2027 and lasting for 15 years.
- (Qatar): On 29 November 2022, Qatar Energy signed two sale and purchasing agreements with Conoco Philips for 2.8 bcm/y for 15 years. irst delivery is expected in 2026 to the recently announced German LNG Terminal at Brunsbüttel.
- (UAE): RWE concluded an agreement with Abu Dhabi National Oil Company (ADNOC) to deliver 137,000 cubic metres of LNG to the new terminal in Brunsbüttel near Hamburg in late December 2022.
- (US): On 25 May 2022, The US infrastructure company Sempra signed a Heads of Agreement on supplying the German utility company RWE with 3 bcm/y starting between 2026 and 2028 and lasting for 15 years. In June 2022, US-based Venture LNG Global and German EnBW signed a long-term agreement to increase LNG exports to Germany from 0.5 to 2 million tonnes per year (an extra 2.1bcm/year). The 20-year deal will start in 2026. A 13-year agreement between Uniper and Australia's Woodside was doubled from 2021 to 1.3 bcm/year of LNG. From 2026, it will rise again to 2.6 bcm/year. To increase supply in Europe more swiftly over the upcoming winter, Woodside would supply from its US natural gas reserves. On 1 December 2022, the chemicals and oil&gas company INEOS signed a 20-year contract with Sempra Infrastructure for the supply of approximately 1.9 bcm/y of LNG from Phase 1 of the Port Arthur LNG facility under development in Texas North America, from 2027. INEOS has also signed a non-binding heads of agreement for the potential purchase of an additional 200 million cubic meters per year from the Port Arthur LNG Phase 2 project under development.
Greek gas utility, DEPA Commercial, has concluded a deal with TotalEnergies for the supply of a total of 10 TWh delivered through two LNG cargoes a month between November 2022 and March 2023. The conditions of the deal set the price at benchmark price (rather than TTF), and allow Greece not to accept delivery if unnecessary upon the payment of a cancellation fee.
- (Domestic): On July 13, the government declared a state of emergency and adopted a 7-point plan on energy security. The government intends to increase domestic natural gas production by 0.5 bcm/y to 2 billion cubic meters per year starting this winter.
- (Russia): On August 13, Tamás Menczer, Hungary State Secretary, said that the government decided that about 700 million cubic meters of natural gas should be procured in addition to the quantities already contracted. This led to an agreement between the Hungarian power and gas company – MVM – and Gazprom, which increased the quantities already contracted for delivery. In the first phase, an additional amount of 2.6 million cubic meters per day arrived from the south of the country via the Turkish Stream pipeline.
- (Algeria): on 18 July 2022, Italian Prime Minister Mario Draghi and was Algerian President Abdelmadjid Tebboune signed 15 deals (encompassing agreements and Memoranda of Understanding) to boost gas supplies by 4 bcm in 2022. The meeting followed a previous visit by PM Draghi in Algeri back in April, when he concluded a deal to increase gas deliveries through the Transmed pipeline by up to 9 bcm/year in 2023-2024. The companies involved in the deals were Sonatrach, Occidental, Eni and Total.
- (Angola): in April 2022, Italy signed a deal for around 1.5 bcm of gas a year from Angola.
- (Congo): In April 2022, Italian energy giant Eni committed to increase gas production in the Republic of Congo and to develop an LNG project with a capacity of more than 4.5 bcm/year from 2023.
- (Domestic): In February 2022, the Minister of Ecological Transition Roberto Cingolani indicated the gas fields of Cassiopea, Argo and Ravenna, as possible fields where to increase gas extraction by 2 bcm/year. Cassiopea and Argo should become fully operational by the first half of 2024, while the one in Ravenna could be scaled up even earlier.
- Libya: On 24 August 2022, ENI and Libyan National Oil Corporation announced a new round of investments to ramp up natual gas production.
The Dutch government announced on 26 September 2022 that gas production in the Groningen field (the biggest in the EU) will be reduced to the bare minimum required to keep wells operating in the upcoming year because extraction is anticipated to end no later than in 2024. Production will be capped at 2.8 bcm/year from October 2022, down from 4.5 bcm in the previous years.
On 22 November 2022, the government announced that Equinor will lead the development of the Irpa gas discovery in the Norwegian Sea to replace Russian flows to Europe. Irpa, is located 340 kilometres offshore Bodø, with expected recoverable gas reserves estimated at almost 20 bcm. It will be developed with a seabed facility that will be connected to the Aasta Hansteen platform for processing and further transport through the Polarled gas pipeline to the markets in Europe. Production is planned to start by the end of 2026 and to last until 2039, extending the life of Hansteen by seven years.
In June 2022, oil and gas company BSOG, controlled by a US private equity firm, started its operations in the Romanian Black Sea. Its platform, 45km away from Ukraine’ Snake Island, is expected to extract around 1 bcm/year.
- (Norway): Polish Oil and Gas Company (PGNiG) and Equinor ASA group companies have concluded gas sales agreements for natural gas from the Norwegian Continental Shelf. The total volume to be supplied under the contracts is 2.4 bcm/year starting January 2023 for 10 years. Gas purchased from Equinor will be delivered to Poland via the Baltic Pipe.
- (US): Sempra Infrastructure (US) and the Polish Oil and Gas Company have entered into an agreement for the purchase of LNG from Sempra's portfolio of projects in North America. Under the deal, Sempra will provide the Polish company with LNG for 20 years, starting in 2027 with 4.2 bcm/y. The deal may include earlier deliveries starting in 2022 or 2023. Poland will receive LNG through a floating storage and regasification unit to be built in the Baltic Sea near Gdansk by 2026, which may be expanded
- (US): The ECFR think-tank reports that the Slovak Gas Industry signed a contract for the purchase of LNG with an unknown party widely suspected to be a US firm (although this is confidential). The firm announced that it would procure 80m cubic metres of LNG, receiving the shipment through a terminal on the Croatian island of Krk. Slovak Gas Industry also signed a contract with ExxonMobil for the purchase of LNG. Details of the contract are confidential.
- (Norway): In May the Slovak Economy Minister Richard Sulík announced that the country’s largest gas supplier, SPP, will start importing gas from Norway via pipeline. Minister Sulík said that, together with the LNG deals, this will allow Slovakia to reduce its dependence on Russia by 65%.
Slovenian company Geoplin and Algeria’s Sonatrach signed a deal for 300 M3m a year to be delivered to Slovenia starting from January 1 2023, for a period of three years.
In October 2022, Naturgy has reported that it has sealed a price review, upwards, of the contracts it had with Sonatrach, the Algerian hydrocarbons monopoly. The new price will be applied retroactively for the volumes supplied until the end of 2022. The contracts currently in force between Naturgy and Sonatrach were signed more than 20 years ago and are valid until 2030 for an annual volume of order of 5 bcm.
- (Domestic): on 22 September 2022, the government decided to reverse the 2019 ban on fracking for shale gas and announced a new licensing round expecting to distribute 100 licences.
- (US): On 7 December 2022, the government stroked a deal with the US to more than double the amount of LNG imports compared to 2021 when the UK imported 3.9 bcm. The agreement foresees at least 9-10 bcm of LNG to be imported through UK terminals in 2023.
- (Azerbaijan): On 18 July 2022, the European Commission signed a memorandum of understanding with a commitment to double the capacity of the Southern Gas Corridor to double the capacity of the pipeline and bring it to 20 bcm annually by 2027. In 2021, the Trans-Adriatic pipeline brought more than 8 bcm of Azeri gas into European countries and Azerbaijan plans to raise the imports by 40% to 11.2 bcm in 2022.
- (US): In March 2022, the European Commission struck a deal with the Biden administration for 15 bcm of additional LNG in 2022 and approximately 50 bcm/year until at least 2030.
1.2 Gas infrastructure developments
Liquefied natural gas (LNG) has played a pivotal role in substituting gas flows from Russia. However, the European regassification capacity is not necessarily located where it is most needed, and many European countries have rushed to build the required infrastructure. Similarly, new gas infrastructure projects are in the pipeline for flows from Norway and Azerbaijan.
Belgium is expanding its Zeebrugge LNG Terminal with additional capacity of 6.4 bcm/year by 2024 and extra 1.8 bcm/year by 2026 built by energy company Fluxy LNG. In the Fluxys Belgium and Fluxys LNG 10-year investment plan, there is a budget line of €116 million for the planned regasification expansions as well as for a new LNG truck loading dock.
In March 2022, Croatian Prime Minister Andrej Plenković announced plans to expand the capacity through FSRU of the Krk LNG Terminal from 2.6 bcm/year to 2.9 bcm/year. In August 2022, the PM confirmed a further 3.2 bcm/year expansion of though onshore LNG infrastructure of the Krk LNG terminal by 2029 to bring total regasification capacity to 6.1 bcm/year. The investment for extension amounts to €25 million.
Since 2009, the government has proposed to build an LNG regasification facility near Vassiliko Port. The facility would import LNG for power generation at the 865 MW Vasilikos power station, as well as for industrial and residential purposes. It would be built by Natural Gas Public Company (DEFA), the state-owned gas company, and a Chinese-led consortium for the construction of the €250 million LNG import terminal and related infrastructure. In June 2020, the European Investment Bank agreed to loan €150 million, followed by a European Commission grant of €101 million, a European Bank for Reconstruction and Development loan of €80 million and €43 million equity contribution by Electricity Authority of Cyprus. While the facility is now under construction, there is ongoing speculation that Chinese contractors are seeking additional funds of between €25 million to cover cost overruns and pushed the start-up date to July 2023.
- (Onshore LNG): Paldiski LNG Terminal is a proposed LNG regasification terminal. The project would be built by Balti Gaas, a subsidiary of Estonian company Alexela Group, by 2025 and its cost is estimated at €400 million and its capacity at 2.5 bcm/year.
- (FSRU): Paldiski FSRU is a proposed floating and storage regassification unit to be jointly leased and managed by Estonia’s and Finland’s gas system operators. The terminal is estimated to cost €500 million. The FSRU regassification capacity has not been officially disclosed yet but the Independent Commodity Intelligence Services (ICIS) puts it at almost 2.6 bcm/year. The terminal should become operative in winter 2022-2023, potentially operative by November 2022.
Hamina LNG Terminal is a facility in the Kymenlaakso region. The operator is Hamina LNG Oy, the cost is estimated at €100 million and commercial operations should start in October 2022. Capacity is estimated at 0.37 bcm/year, but there are already plans to increase it soon.
FSRU: In June 2022, Gasgrid Finland and Fortum have signed a Letter of Intent on placing Finland’s first floating LNG terminal vessel Exemplar at Fortum’s Inkoo port. The terminal would be leased by U.S.-based LNG company Excelerate Energy to Gasgrid for 10 years and should be available in winter 2023. The FSRU would have 5 bcm/year regassification capacity and serve the gas market in the entire Baltic Sea region via the Balticconnector interconnector pipeline.
Le Havre FSRU is a floating and storage regassification unit announced by the French government. The terminal should be installed in the port of Le Havre, in Normandy, by TotalEnergies as soon as January 2023.
The government has adopted the LNG Acceleration Act to fast-track the development of new LNG infrastructure.
- (Onshore LNG): three LNG terminals are proposed for construction: TES Wilhelmshaven LNG Terminal, with capacity of 16-20 bcm/year, operated by Tree Energy Solutions, located in Wilhelmshaven port in Lower Saxony, and starting operations in 2025; Brunsbüttel LNG Terminal, also called Hamburg LNG Terminal, with capacity of 8 bcm/year, owned by Gasunie, Oiltanking GmbH and Vopak, and starting operations in 2026; Stade LNG Terminal with regasification capacity of 13.3 bcm/year, owned by the Hanseatic Energy Hub (a consortium of, mainly, the Buss Group, Dow Chemical, Fluxys and Partners Group), and starting operations in 2026.
- (FSRUs): Six FSRUs proposals are currently in development in Germany. First to become operative is the Wilhelmshaven FSRU Terminal, in Lower Saxony. It has regassification capacity of 7.5 bcm/year, costs €400-450 million and it is owned and operated by Uniper, with starting date expected to be winter 2022-2023. Second is Brunsbüttel FSRU, which will have capacity of 8 bcm/year, will cost €1 billion and should go online between late 2022 and early 2023. It is owned by Gasunie (40%), Kreditanstalt für Wiederaufbau (50%) and RWE (10%). Third is Lubmin FSRU, will be supplied TotalEnergies to Deutsche Regas, company that is developing an LNG terminal port of Lubmin - situated at the exit point of Nord Stream. The FSRU will have capacity of 4.5 bcm/year and should become operational between December 2022 and January 2023. The fourth FSRU will become operational in the port of Stade by the end of 2023. The vessel should have annual capacity of 5 bcm/year. Also in Wilhelmshaven port, the fifth special vessel will have capacity of at least 5 bcm/year and is scheduled to go into operation in the fourth quarter of 2023. Excelerate, the owner of the vessel, will provide the FSRU to the consortium of TES /E.ON/Engie companies, and provide the technical operation and other necessary services. The sixth FSRU will also be located in the port of Lubmin with capacity of 5 bcm/y and will be operated by RWE and Sterna Power at the end of 2023.
Revithoussa LNG Terminal is an LNG terminal in Attica, operated by DESFA since 2000. In 2019, Snam, Enagas and Fluxys bought a 66% stake in DESFA, leaving the remaining 34% to the Greek government. In April 2022, DESFA announced to upgrade the terminal adding a FSRU facility and increasing regassification capacity by 12 % or by 0.8 bcm/year by July 2022. Argo FSRU Terminal shall be in the Port of Volos, Greece. Its cost is estimated at €226 million, it will be owned and operated by Mediterranean Gas, and it will have capacity of 4.6 bcm/year. It should become operational from the third quarter of 2023. Thrace FSRU Terminalis a proposed FSRU terminal in the Aegean Sea, offshore Alexandroupolis. The owner, Gastrade, took a final investment decision for the project in January 2022. The FSRU will have a regassification capacity of 5.5 bcm/y. ICIS put the start date as early as January 2023. Thessaloniki FSRU Terminal was announced by Elpedison (company owned by Hellenic Petroleum by 50% and Edison by 50%) in April 2022, with estimated start date 2025. The total regassification capacity will be 7.3 bcm/y. Dioriga FSRU Terminal is a proposed FSRU to be placed in the Gulf of Corinth and owned by Dioriga Gas. The FSRU should become operative in 2023 and have regassification capacity of 2.6 bcm/y. The cost is estimated at €300 million.
Shannon LNG Terminal is a proposed LNG terminal in Munster Province, owned and promoted by New Fortress Energy. The facility would be developed in three phases, the first to be concluded in 2022 and bringing 2.8 bcm/y of regassification capacity, the second to be over by 2025 and add 2.1 bcm/y and the third to be ended by 2029 with additional 3.3 bcm/y. However, the project status is on hold following an announcement by the government agency An Bord Pleanála that it would delay a decision on the terminal's planning permit.
- (Onshore LNG): In March 2022, Adriatic LNG announced that it had increased its terminal capacity by 13% or 1 bcm/y. Gioia Tauro LNG Terminal, also known as LNG Medgas, is a project in Calabria proposed by IRIDE together with Sorgenia. The cost would cost approximately €1 billion and should become operative in 2026. Porto Empedocle LNG Terminal is a proposed LNG terminal in Sicily owned by Nuove Energie (bought by Enel). The project would cost €1 billion and be ready by 2026.
- (FSRUs): In March 2022, Snam bought the LNG carrier Golar Arctic, and its conversion to FSRU, at the price of €269 million. The FSRU will be place in the port area of Portovesme (in the province of Cagliari). In summer 2022, Snam bought the FSRU Golar Tundra, to be deployed in Piombino, in Tuscany, for €330 million and the FSRU BW Singapore for Ravenna, in Emilia-Romagna. The former facility has regassification capacity of 5 bcm/y and should become operating during the spring of 2023 whereas the latter has regassification capacity of 5 bcm/y and that will become operational in 2024.
Skulte LNG Terminal is a proposed LNG terminal in Latvia that would have regassification capacity of 6.2 bcm/y. The estimated cost is €110 million and the infrastructure should become operative in either 2023 or 2024 and could supply neighbouring countries including Estonia, Lithuania, Finland and Poland. In April 2022, Latvia's prime minister Krišjānis Kariņš said that the government had "conceptually agreed" to begin construction of an LNG import terminal in the outskirts of Riga.
Klaipėda FSRU is an operating FSRU, owned and operated by Höegh LNG in the port of Klaipėda. In March 2022, Klaipedos Nafta was "considering" expanding the terminal's technical regasification capacity to 5 bcm/year "in the long term".
- (FSRU): FSRU S188 is a floating storage and regassification unit bought by Exmar and arriving in summer 2022 in the LNG import terminal of Eemshaven in Groningen, Netherlands. Moreover, Gasunie’ subsidiary EemsEnergy Terminal is expanding its new LNG facility by leasing a second FSRU from New Fortress Energy for 5 years. The latter became operational on 14 September 2022. Both FSRUs will become operative in the fall of 2022 and will bring the terminal’s total regassification capacity to 8 bcm/y and the terminal’s cost is estimated at €300 million. Global Energy Monitor reports that “In July 2022, Gasunie announced that it had contracted 7 bcm of the terminal's overall 8 bcm capacity jointly to Czech energy company ČEZ and Shell Western LNG. ČEZ also secured pipeline capacity from Eemshaven to allow the Czechia to import up to 3 bcm of LNG per year, which amounts to roughly one-third of the country's gas consumption. The French energy firm Engie booked the remaining 1 bcm regasification capacity at the terminal.”
- (Onshore LNG): GATE (Gas Access to Europe) LNG Terminal is regasification terminal owned by Gasunie in the port of Rotterdam. An expansion project has been proposed in 2019 (and revived in 2022) which would increase the total terminal capacity by 1.5 bcm/y from 2024.
- (Onshore LNG): An expansion for the Świnoujście Polskie LNG Terminal in the Western Pomeranian Province was completed in January 2022, raising annual capacity from 5 bcm/y to 6.2 bcm/y. A second expansion to be completed by 2023 has been contracted for the value of $483 million, which should bring the total regassification capacity of the terminal to 8.3 bcm/y.
- (FSRU): in June 2022, the Polish Minister of Climate and Environment, Anna Moskwa, announced plans to double the Gdansk FSRU terminal capacity, bringing it to 12 bcm/y. If the polish company GAZ-SYSTEM takes a positive final investment decision, the terminal should be operational in 2027/2028. The Czech and Slovakian governments are interested in accessing up to 6 bcm of Poland's gas delivery capacity.
A new pipeline named the Baltic Pipe, connecting Norway to Poland via Denmark, is in the final stages of construction and should be running at full capacity – of 10 bcm – from October 2022.
Gas pipelines and interconnectors
This is a natural gas pipeline linking the Greek and Bulgarian natural gas pipeline networks. The capacity of the pipeline is to be 3 to 5 bcm/y with reverse flow capability. The connecting points are to be Komotini, Greece and Stara Zagora, Bulgaria. The length of the pipeline will be about 180 km (150 km in Bulgaria, 30 km in Greece). The interconnector will allow Bulgaria to be tied-in with the Trans-Atlantic Pipeline (TAP), bringing Azeri gas into Europe. The project cost was estimated at €220 million. The pipeline was inaugurated on 1 October 2022.
On 7 September 2022, the gas system operator GRTGaz connecting the border communities of Obergailbach and Medelsh announced to have successfully passed tests in reverse-flow to carry natural gas from France to Germany. The French Superior Energy Council will still need to weigh in on the expenses before the CRE can give its final approval for France to begin delivering gas to Germany via the pipeline as of October 10. If the project is approved, GRTGaz will be able to sell 100 Gigawatt hours (GWh/d) to Germany, or 3.5 bcm/y of new capacity.
As of 1 November 2022, the interconnector will increase capacity from 2.4 bcm/y to 4.6 bcm/y from Lithuania to Latvia and from 2.3 bcm/y to 4.2 bcm/y from Latvia to Lithuania. The enhancement of Latvia-Lithuania interconnection (ELLI) was included into the third PCI List adopted by the European Commission on 24 November 2017. The total cost of the project is €9.77 million, of which €5.50 million for Conexus and €4.27 million for Amber Grid, the Lithuanian natural gas transmission system operator, and 50% co-financing from the Connecting Europe Facility.
The interconnection between was commissioned in May 2022. The interconnector strengthens the energy independence of the region and increases the possibility of using the Klaipėda LNG terminal in Lithuania and the Świnoujście LNG terminal in Poland. The capacity to transport gas from Lithuania to Poland is expected to reach 1.9 bcm/y, while gas transportation capacity from Poland to Lithuania will be 2 bcm/y. As a project of common interest (PCI), it is a key project supported by the EU’s Trans-European Networks for Energy (TEN-E) policy and has received €266.3 million co-financing from the EU Budget (Connecting Europe Facility).
On August 26, 2022, it was inaugurated a gas interconnector with a total length of approximately 165 km. This was a Project of Common Interest over the period 2013-2021 and costed €243 million, 40% of which were EU funding. The nominal transfer capacity is 5.7 bcm/y in the direction from SK to PL and 4.7 bcm/y in the reverse direction. The Action will result in the first interconnection between the Polish and Slovak gas transmission systems being established.
The Baltic Pipe will make it possible to import up to 10 bcm/y from Norway to Poland and to transport 3 bcm from Poland to Denmark. The gas began to flow on 1 October 2022. The Baltic Pipe has been a Project of Common Interest since 2013 and has received around €267 million of EU funding through the Connecting Europe Facility.
On July 18, the European Commission President Ursula von der Leyen and Commissioner for Energy Kadri Simson met with President Ilham Aliyev and Azeri Energy Minister Parviz Shahbazov to sign a Memorandum of Understanding on energy to support the doubling of the capacity of the Southern Gas Corridor up to at least 20 billion cubic metres (bcm) annually as of 2027. The European Commission also reported that Azerbaijan is already increasing deliveries of natural gas to the EU from 8.1 bcm in 2021 to an expected 12 bcm in 2022.
2. Policies to tap into short-term alternative energy sources
a. Coal ramp-up
Electricity generated by coal-fired power plants has decreased by more than 40% in EU countries and the UK since 2015. By 2021, around half of Europe’s 324 coal-fuelled power plants had either closed or announced a retirement date before 2030. Nonetheless, coal is the only dispatchable fuel with quick start-up times where the EU has substantial spare capacity. While commitments to phase out coal by 2030 still stand, spare capacity in coal power plants is remarkably high and, in some countries, exceeds 70%. Increasing coal use for electricity generation shall be understood merely as an extraordinary and temporary measure to navigate through gas shortages and complementary to a faster deployment of renewable energy. Yet, increasing the share of coal in power production production can displace up to 29 bcm of gas every year with relatively low increases in greenhouse gas emissions (Ember estimates that all coal back-up plants would increase emissions by around 30 million tonnes of CO2 amounting to 1.3% of EU CO2 emissions in 2021 and displace around 12 bcm of natural gas used in electricity generation). There were expectations of temporarily high rates of gas-to-coal switching, thus increasing the share of coal in the energy mix and decreasing that of gas to navigate through the energy crisis. However, this did not happen to the expected extent.
Since the beginning of 2022, both coal and gas shares in the electricity mix have generally been on an increasing trend, only slightly declining in the spring and summer months in countries with a high solar penetration. This is likely attributable to a combination of two factors. First, severe droughts over the summer led to lower-than-usual hydropower energy production in Italy and Spain, and hampered coal power plants that need water to cool down the steam used to make electricity and to keep pollution under control. Second, shortcomings in the French nuclear fleet and the need to compensate for that baseload in the grid pushed France and Spain to increase their gas usage in power production compared to 2021. Coal demand in the EU has increased in the first half of 2022. Estimates report an increment in EU coal consumption of 10%, driven by higher coal demand of the electricity sector (up by 16%). The IEA (International Energy Agency) also expects coal consumption to keep rising in the second half of 2022, and forecasts a 7% year-on-year increase in the EU’s coal consumption to 476 million tonnes.
The government ordered state-controlled Verbund AG to make the use of coal possible again as an alternative to gas during supply bottlenecks or in the case of a total supply failure, even though VERBUND ceased coal-fired operations at the Mellach power plant in Styria already in March 2020.
On 1 October 2022, the Danish Energy Agency has started to revisit the planned closure of three power plants that would temporarily be able to contribute to the security of electricity supply - especially in the winter of 2023/2024. Two of them are coal-fired power plants: Studstrup Power Station unit 4, with 360 MW capacity, is out of service since April 2022; Esbjerg Power Station's unit 3, with 370 MW capacity, is currently in operation and is planned to be decommissioned in April 2023.
On 16 September 2022, Fortum announced that the last Finnish coal-fired power plant Meri-Pori would undergo annual outage in the month of October so that it can be deployed for commercial use at its full capacity 560 MW from November 2022.
In September 2022, at the request of the State, GazelEnergie brought the coal power plant located in Moselle back into service. Unit 6 of the Emile-Huchet power plant (Saint Avold), with a power of 600 megawatts (MW), will operate for 2,500 hours this winter - from 1 October 2022 until the end of March 2023.
Economy Minister Robert Habeck announced the restarting of an unspecified number of coal-power plants. In July 2022, the German government created a ‘gas replacement reserve’ with a total capacity of 10.6 GW. It includes 1.9 GW of lignite and 4.3 GW of hard coal power plants, which were already in reserve, and 2.6 GW of hard coal power capacity, which had been scheduled for decommissioning in 2022 and 2023. In late September 2022, the government adopted new regulations allowing for the reactivation of retired lignite plants and RWE announced to bring back online three lignite units of Neurath and Niederaußem, each with 300 MW capacity until 30 June 2023.
The government has reportedly announced the intention to ramp-up lignite production by 50% despite the pledge in its 2019 National Energy and Climate Plan to phase-out coal-fired power generation by 2028 and shut down the lignite-fired power plants currently in operation, which were to be completed by 2023. The gas grid operator DESFA announced that it will keep seven coal-fired plants running for longer than previously planned, citing the current energy crisis.
The government declared a state of emergency and backtracked on its commitment to phase-out coal by 2025. It decided to boost its annual production of natural gas from 1.5 bcm to 2 bcm, to increase the extraction of coal and restore an offline lignite-fired power plant in Matra. Back in 2021, the government intended to reach 90% carbon neutral electricity generation by 2030 by maintaining its existing nuclear generation capacity and increasing solar power to 6 GW and by phasing out the lignite-fired blocs of the last remaining coal-fired power plant.
In February 2022, Prime Minister Mario Draghi announced that the reconversion of some of the six coal-fuelled power plants now operative in the country might be delayed and that one plant currently being decommissioned may be re-started in the case of a further worsening of the crisis.
Poland: The country suspended in September a ban on the use of lignite for heating homes until April 2023. In June, it said it plans to "increase thermal coal production from existing mines this year maximum by 1.5 million tonnes".
The government reverted the decision to anticipate the date of the complete coal phase out (originally set to 2032, then to 2030 before the latest reversal) by suggesting to postpone the closure of coal plant units Rovinari 3 and Turceni 7 due to be decommissioned on 31 December 2022.
The ministry for the ecological transition requested in May the delay of Endesa's As Pontes coal power station closure. In September, it authorised the conditional closure of two of the plant's four groups, "taking into account the reinforcement of power availability variables".
Britain's National Grid signed contracts with power generators Drax Group and EDF Energy to extend the life of four coal-fired power units at two plants. Also, the government reached an agreement with Uniper to prolong the lifespan of its Ratcliffe coal power station due to close in September 2022 to make the unit available until the end of September 2024.
In December 2022, the government approved the first new coal mine in the country in over 30 years. The mine is located in Cumbia and it would dig up coal largely for steel production reducing the need to import coal. The project approval was suspended in 2021 over concerns on carbon emissions, but it got a green light in the hope that it would lead to jobs and investments. Reportedly the coal would not be used for power generation.
2.2 Nuclear closure postponements and investment accelerations
The current energy crisis has put into question commitments to close reactors and phase-out nuclear energy. In the short term, some governments have decided to postpone the closure of nuclear reactors while in the long term, others have decided to accelerate investments aimed at deploying new nuclear capacity. Estimates put potential gas savings at approximately 8 bcm/year, assuming 50% efficiency of gas-fired power plants and a nuclear production capacity factor equal to 70%.
On 19 March 2022, Prime Minister Alexander De Croo announced that “the federal government has decided to take the necessary steps to extend the life of two nuclear reactors by 10 years”. The measure will delay the Belgian phase-out from nuclear that was planned for 2025. The reactors in question are Tihange 3 and Doel 4 which account for 1,038 GW and 1,039 GW capacity respectively. Another measure being under study is the lifetime extension of Tihange’s 2 nuclear plant – which should normally close in the first quarter of 2023. The government has asked Engie, which operates Belgium’s nuclear plants, to discuss this with FANC, the national nuclear safety authority.
The escalation of the energy crisis accelerated the roll-out of new nuclear power plant construction projects. A small modular reactor (SMR), easier and faster to build than large nuclear reactors. One could be built at the Temelín NPP between 2032 and 2035, while proceeding with the preparation for the construction of two standard units to build new reactors generating 2.4 GW by 2036
The national energy agency warned that the country faces a greater risk of power outages in winter 2022-2023 because of another delay in starting up the new Olkiluoto 3 (OL3) nuclear reactor.
In February 2022, Macron announced a plan to build six new generation EPR2 reactors, for a first commissioning by 2037, and a study for the construction of eight more by the end of 2050. The government also intends to support the deployment of small modular reactors (SMR) in the NUWARD project. In September 2022, the government presented legislation to ease the construction of new nuclear reactors at existing plants by shortening the administrative deadlines to lay the first stone of the first EPR 2 before the end of the five-year term and would provide exemptions to environmental laws on coastlines and on the protection of endangered species. The government allocated €1.2 billion in funds to accelerate the deployment of nuclear power.
Following the nuclear phase-out regulated in the Atomic Energy Act, Germany was to phase-out all nuclear reactors by 2022. Today nuclear power plants will no longer produce regular electricity. However, due to the energy crisis, all three remaining nuclear power plants (Neckarwestheim 2 in Baden-Württemberg, Isar 2 in Bavaria and Emsland in Lower Saxony) will remain on the grid as a reserve until April 2023. The respective capacity is 1310 MWe for Neckarwestheim 2, 1335 MWe for Emsland, and 1410 MWe for Isar 2.
On 13 July 2022, the government declared a state of emergency deciding not only to reopen one lignite-fired power plant in Matra but also to extend four reactors of the Paks nuclear power plant.
On 9 December 2022, the government announced that it is planning to build two new nuclear reactors by 2035, starting in 2028. The third-generation nuclear reactors will each have a capacity ranging between 1,000 MW and 1,650 MW and will generate around 24 TWh/year, i.e., between 9% and 13% of the country’s total expected power generation for 2035. The announcement follows an objective laid out in the government coalition plan of December 2021 when the government allocated €5 billion to the construction of the new reactors as part of the €35 billion Climate and Transition Fund allocated to fund the energy transition. The reactors would be based in Borssele, the site of the only other existing nuclear power plant in the country. In addition, the government is extending the life of the existing 482 MW Borssele nuclear plant beyond its decommission year set in 2033.
According to the 2021 document Poland's energy policy until 2040, the government plans to launch the first power unit of a nuclear power plant with 1-1.6 GW capacity in 2033 and build subsequent units up to six within 2040. The prime minister intends to accelerate their construction and bidding offers ranged in the order of six 1650 MWe EPR units to 1345 MWe APR1400 units.
On 25 August 2022, the Slovak Nuclear Regulatory Authority issued the final authorisation for commissioning of the Mochovce NPP Unit 3. The utility Slovenske Elektrarne has completed loading fuel and the power plant is expected to be operational from late 2022. The new unit will produce around 3.7 TWh per year, covering 13% of Slovakia's electricity consumption.
The government has commissioned Vattenfall to investigate the life-time extension of Ringhals 3 and 4 (currently expected to be active until 2040). The government is reportedly investing SEK 400 billion (€36.5 billion) in credit guarantees for the construction of new nuclear power and has commissioned state-owned Vattenfall to start planning for it. The new government will also make regulatory changes to simplify the process for nuclear construction, including introducing a regulatory fast-track for reactor types that have been approved in other EU countries.
The government stated the intention to reverse the nuclear policy of the last years (as of now, five out of six of the existing plants will be offline within the decade), and to increase plans for deployment of civil nuclear to triple the current capacity up to 24GW by 2050 by building up to up to 8 more reactors. For this, it launched the Future Nuclear Enabling Fund (£120 million) in April 2022 and has designated eight new nuclear sites across the country.
3. Policies to foster energy savings and energy efficiency
3.1. Policies for energy saving
On 26 July 2022, EU countries reached an agreement on a voluntary reduction target of natural gas demand equal to 15%, compared to average consumption of the previous 5 years. The target pertains to all EU countries, but exemptions and derogations apply. Exemptions from the target affect countries that are not interconnected to other EU countries’ gas networks, whose electricity grids are not synchronised with the European electricity system and are heavily reliant on gas for electricity production. Upon assessment of the European Commission, a derogation implying 8% decrease of the target apply in, eg cases where the interconnections are used to at least 90% of their capacity. On 30 September 2022, EU countries agreed to electricity demand reduction targets to reduce overall electricity consumption by 10% on a voluntary basis and by 5% on a mandatory basis during peak-hours. The measures are supposed to stay in place until 31 March 2022 and are expected to save 1.2 bcm gas over a 4-month period.
The government launched Mission 11, energy-saving campaign that focuses on raising awareness on the behavioural changes needed to save energy by 11% covering the fields of electricity, heat, mobility, and hot water, eg by turning down the heating by two degrees.
On 15 July 2022, the government approved a ‘Winter Plan’ that promotes the "responsible use of energy"among households (via the Regions) and industry (by putting a demand management tool in place with the Creg and Fluxys). The federal government has decided to lower the temperature to 19 degrees in all its buildings. The use of air conditioning will be regulated (to a maximum of 27 degrees). Lighting in federal buildings and monuments will be turned off between 7 pm and 6 am. The federal government launched an awareness-raising campaign to invite the population to turn down the heating to one degree and select night mode an hour earlier, choose energy-efficient appliances, and prefer alternative means of transportation to cars. Most of the measures were implemented as of 26 September 2022.
On 28 July 2022, the government adopted guidelines to save energy until March 31, 2023. Proposals include setting thermostat limits (eg room heating to a maximum of 21 degrees and cooling to 25 degrees), greater use of LED lighting and public transport, and cheaper electricity tariffs.
The government published a manual advising how to save energy in the upcoming winter. To incentivise households to start better monitoring, it encourages them to apply for subsidies for energy management. Then, it has set temperature limits in both private and public buildings, eg the government has reduced the temperature in offices by 1.5 degrees. Also, it has decided to drop the minimum temperature in working environments by at least two degrees.
The Danish Energy Agency (DEA) launched a USD 3.6 million energy saving campaign urging citizens and public places to adopt energy-saving behaviours.
On 5 October 2022, the government implemented an energy saving program in state-owned properties that aims to save 50-75 GWh and up to €10 million in energy costs. The "One Step Lower" campaign, which kicked off during Energy Saving Week on 10 October 2022, encouraged all companies, organisations and individuals to save energy.
President Emmanuel Macron announced a plan of ‘energy sobriety’. The plan aims to reduce energy consumption by 10% over the next two years compared to 2019 through a combination of measures for buildings, industry, transportation, and individual consumption. Actions for buildings include: temperature limitations at 19°C for heating and 26°C for cooling (7% energy savings per year); the insulation of hot water networks running through unheated spaces (5-10% energy savings per year); improve the deployment of the individualisation of heating costs (15% energy savings per year). Also, the government aims to ban shops from leaving their doors open while the air conditioning and heating are on, neon signs in all cities between 1am and 6am, and improve lighting management where optimisation can lead to up to 70% less expenditure. In particular, the government approved more than 800 projects to reduce the fossil fuel consumption of public buildings, worth €50 million in June 2022. Concerning industrial processes, the New Energy Systems strategic committee presented the ‘IDécarbone’ initiative to reference decarbonisation solutions and to put in touch professionals and companies wishing to decarbonise their industrial sites. Finally, the government is promoting awareness-raising campaigns on eco-actions, eg encourage sustainable mobility and teleworking to limit travel.
In early December 2022, the risk of energy shortages lead the government to announce a contingency plan for power cuts.
The government has put in place two regulations to reduce gas consumption which should promote a signal and role model effect and initiate voluntary energy-saving measures, in addition to the direct savings effects. For energy savings in the short term, the government put in place Measures of the Ordinance to Secure the Energy Supply by Short-Term Effective Measures (EnSikuMaV), valid for six months, whose measures include: the temporary suspension of contractual obligations that binds tenant to a minimum temperature in rented rooms; a ban on the use of gas/ electricity fuelled heating for swimming and bathing pools; mandatory temperature reduction to 19 degrees and switching off of drinking water heating systems in public non-residential buildings (except medical facilities, facilities for the disabled, care facilities, schools or day-care centres); elimination of lighting of buildings or monuments; provision of more and more detailed information for private energy saving measures by gas and heat suppliers; restriction on the use of illuminated advertising systems.
The government launched the Saving at Home programme to raise awareness about behavioural changes to save energy in the households. In public buildings, measures range from lowering office temperature levels and reducing night-time floodlighting of public buildings to setting up a digital platform to monitor public sector energy use, and link compliance to funding for budgets, with bonuses for over-performing branches and cuts for those who fail their savings targets.
The European Commission's gas demand reduction initiative, was opposed only by Hungary. However, the government set new goals in September 2022 to cut gas consumption by 25% this winter for businesses and public buildings, as well as to limit the maximum heating temperatures in public buildings, control the cost of firewood, and announce plans for a programme to aid energy-intensive small businesses.
The National Energy Savings governmental scheme sets out measures to cut gas consumption Compulsory measures include reducing heaters by one degree (from 20 to 19 degrees) and the heating period by cutting 15 consumption days in October and April – for a total saving of 3.18 bcm. Voluntary measures would save up to 2.7 bcm and include actions to raise awareness among citizens about significant behavioural changes (eg reduce the temperature and duration of showers for 2-3 minutes, lower the fire after boiling and reduce the duration of oven ignition, use the electric heat pumps used for summer air conditioning for winter heating, etc). On 6 October 2022, the Ministry of Ecological Transition published an additional decree focused on measures aimed at reducing heating consumption. In particular, it confirms both the reduction by 1 degree and by 15 consumption days during the winter, but it introduces some exceptions (eg hospitals, nursery schools, swimming pools, etc).
The government and local government administration will be obliged to reduce electricity consumption by 10% from 1 October 2022.
On 22 September 2022, the government released its Energy Saving Plan 2022-2023 which encompasses separate reduction measures for the areas of energy, water efficiency and mobility, and covers the public, central and local, and private government sectors, including industry, trade and services and citizens. Measures include: limiting temperatures of indoor air-conditioning equipment to 18°C in winter and 25°C in summer; closing entrance to the street with the air conditioning system on should keep doors and windows closed; favour local production of electricity from renewable energy sources; increase water use efficiency; etc.
The Energy Savings decree outlines measures to promote energy savings and efficiency, including temperature limitations to 19-27 degrees for heating and cooling in buildings (ie public buildings, private enterprises, hotel and catering industry, public transport); switching off lights in shop windows and public buildings after 10 pm; compulsory introduction of automatic system for closing the doors that open onto the street; obligation to carry out efficiency inspection in those buildings obliged whose last inspection is prior to 1 January 2021.
The government has launched an awareness raising campaign to inform citizens on how to save energy.
In July 2022, the government adopted measures to save energy in public buildings and all their premises with a built-in air system by limiting cooling temperature to no less than +25 °C, and no less than +28 °C from 6 pm and 7 am during weekdays and the weekends (exceptions apply). The Ministry of Infrastructure prepared proposals for everyday energy saving measures for households and businesses. In September 2022, the government approved a law with measures in energy crisis situations in crisis that allows it to impose a limitation on lighting and a limitation on air temperature for heating purposes in public buildings for up to one year after the expiry of the declaration of emergency. In addition, it introduces rewards for consumers who choose to voluntarily reduce their gas and electricity consumption by 15% between 1 October 2022 and 31 March 2023 by refunds in the form of a pro-rata reimbursement of the Renewable Energy Sources contribution.
As its largest nuclear reactor, Oskarshamn 3, is shut down for maintenance until 18 December 2022, the government urged the population to consume less electricity to stave off the risk of power cuts.
The government launched a platform to increase awareness on how to make energy saving improvements in households.
3.2. Policies for energy efficiency
Beyond reducing overall energy consumption, REPowerEU raised the 2030 energy efficiency target set at 9% in Fit-for-55 to 13%. Then, it pushed to accelerate the deployment of energy efficiency investments already planned with the post-Covid-19 recovery plans, providing the regulatory framework and guidance on their implementation. Indicated measures vary from awareness-raising campaigns to promote a switch to more energy efficient appliances, to speeding up the renovation of buildings, the electrification of industry (usually the quickest to switch to energy efficient processes), and the deployment of electric heat pumps usually employed in the summer months. With the escalation of the energy crisis, EU countries accelerated the roll-out of measures to improve energy efficiency. The immediate gas saving potential could amount to 60 bcm already by October 2023 and more long-term policies could save more than 200 bcm a year by 2030, or about half of 2020’s total gas demand.
The federal government has already reduced VAT tax for demolition and reconstruction to 6% has been extended until the end of 2023 under the same conditions.
The government plans to relaunch building renovation projects foreseen in its national Recovery and Resilience plan, eg it allocated €25 million for repairs to 175 kindergartens and schools.
Medium-term approaches target building renovations (including envelope insulation, replacement of windows, installation of a modern heating sources) using funds from the National Recovery plan and the framework of the Environmental. So far, €40 million have been earmarked for the scheme. Heap pumps are partially subsidised by the state. A new push for a National energy Savings plan provides a larger subsidy for people who insulate the house and at the same time replace the outdated method of heating with a modern one or improve rainwater management. The government has approved an amendment that will simplify the permitting procedure for smaller renewable sources. On 14 November 2022, the government announced the New Green Savings Light programme that offers financial support for seniors and low-income households to insulate and/or renovate their homes for up to CZK 150,000 (€6200 c.a.). New Green Savings Light will be financed from the Modernisation Fund. The HOUSEnerg programme has allocated €1.5 billion for a pilot project to support an initial amount of 10000 lower income households.
the government provided support for expedited replacement of individual gas heating system for a total budget of DKK 250 million (€33.6 million).
On 12 January 2022, the government announced that the installation of fossil fuel-fired boilers would be outlawed from 1 July 2022 to promote the in deployment of low carbon equipment. To support households and companies, the measure foresaw up to €4000 financial support under the MaPrimeRenov program. On 6 October 2022, the government announced a plan to promote a programme of ‘energy sobriety’. Measures include the deployment of control systems, eg thermostats, which can save between €100 and €200 each year. Also, it reinforced the energy saving certificates (CEE) system to mobilise €4-6 billion per year for energy efficiency and allocated €2.5 billion in 2023 for support schemes for energy renovation, ie MaPrimeRénov. This translates into a supplementary €1,000 bonus to households replacing their gas or oil boiler. Some claim that while the scheme has proven useful in favouring the installation of more efficient heating apparatuses, it has not delivered on the retrofitting front, with ‘comprehensive renovations’ accounting for barely 0.1% of applications. The government is stepping up actions in the transport sector including: tackling energy efficiency of facilities and fleets, via the ongoing renewal of rolling stock or the recovery of energy through braking in metros; the increase in the use of alternative traction energy sources to fossil fuels, eg hydrogen or batteries.
The government put in place Measures of the Ordinance for Securing the Energy Supply by Medium-Term Effective Measures (EnSimiMaV) valid for the next two years. Actions include increasing energy efficiency in public, private and corporate buildings by imposing an obligation to check and optimise heating; hydronic balancing for owners of large buildings with a central heating supply; obligation to implement economic efficiency measures in companies with an energy consumption of 10 GWh per year are obliged to implement economic energy efficiency measures from 1 October 2022. The Climate and Transformation Fund allocatesaround 62% of investment expenditure to the promotion of energy efficiency and renewable energy measures in the building sector. In April 2022, the government announced that the Federal Subsidy for Efficient Buildings (BEG) would restart with a budget of €1 billion for a new push to building renovations.
The government strengthened the ‘Recycle - Change Device’ programme to support the substitution of household appliances (eg air-conditioners, refrigerators, freezers) with energy-efficient versions by reimbursing part of the purchase price. Also, it intends to launch a programme (€640 million) for the energy upgrade of 2.5 million square metres of buildings used by the public sector.
Italy is the country with the highest percentage of gas boilers used as primary source of heating. The energy savings plan encourages behavioural measures to increase energy efficiency such as: replacement of higher consumption appliances and air conditioners with more efficient ones, installation of new electric heat pumps, installation of solar thermal panels to produce hot water, replacement of traditional light bulbs with those LEDs. Enea conservatively calculates savings of 200 million cubic meters, compared with a potential of more than 1 bcm.
On 1 April 2022, the government launched a package of measures entitled “Mitigation of the Effects of Inflation and Strengthening Energy Independence”. EU investments are planned as the source of funding for the program. The interventions aiming at strengthening the energy independence include projects for households and the public sector. Among them, €275 million is allocated for a new renovation investment platform, while the grants for green renovation and modernisation of multi-apartment buildings amount to additional €277 million. This measure is intended to subsidise 30 % of renovation projects that will reach at least the energy performance class ‘B’ of buildings and to deploy renewable technologies. Also, the renovation of public buildings is planned by allocating €40 million.
A substantial insulation programme was started in April 2022, seeking to invest €4 billion in enhancing the energy efficiency of 2.5 million households by 2030, or almost one third of the country’s housing stock. Homes with the lowest energy ratings (E, F, and G) will be renovated first, with homeowners receiving subsidies equal to 30% of expenses and additional assistance for those unable to pay for the work themselves. Houses rated E, F, or G cannot be rented out after 2030. From 1 January 2022, the average subsidy rate for the various insulation measures has been increased (as well as the subsidies for heat pumps and solar boilers) from 20% to 30%. The goal is to install 1 million hybrid heat pumps in existing buildings by 2030 and to start the phase-out of mono central heating boilers. On 17 May 2022, the government announced that hybrid heat pumps will be the standard for heating homes from 2026. Until 2030, the cabinet has set aside €150 million per year to continue to support homeowners in the purchase of a (hybrid) heat pump. The government has also announced that homes with poor energy labels (E, F, G) will not be rentable after 2030. On 18 October 2022, the government announced that the budget for the measure would be increased by €62 million due to the large number of applications bringing the overall amount available to €290 million in 2022.
Poland is quickly becoming the fastest-growing market for heat pumps in Europe: in 2021, the market expanded by 66% with more than 90,000 units installed reaching a total of more than 330,000 units. This is probably the result of Poland’s Clean Air Programme started in 2018 and powered-up in May 2020 distributing €25 billion €to households over 11 years to move aways from solid fuel heating. The war in Ukraine however seems to have accelerated the uptake among households, who doubled the installations compared to 2021. The government has been offering residents up to €6,700 since 2018 to move from coal boilers to cleaner types of heating. As of 15 July 2022, yet another version of the programme – Clean Air Plus – was launched. This propped up the subsidy for the thermal modernisation of homes or replacement of outdated heating boilers up to a 90% subsidy, or €16,260, making also the application process easier.
The government has raised the target for its debut offshore wind power auction to 10 GW (up from 6-8 GW announced in June 2022) to accelerate the transition to renewable energy.
In August 2022, the government submitted to public consultation a Draft Royal Decree regulating the aid programme for energy rehabilitation actions in existing buildings in the tertiary sector that would be financed under the National Energy Efficiency Fund (€100 million) until December 2024. The fund will deliver as direct concessions to the autonomous communities and cities to subsidise actions that achieve a reduction in final energy consumption of 10% and that improve efficiency (Ie thermal envelope, use of renewables in heating, cooling, ventilation and domestic hot water thermal installations, lighting installations, replacement of refrigeration appliances with high efficiency ones with energy labelling, improvement the air conditioning of the data processing centres). Also, the government will increase by €100 million the energy efficiency programmein the industry, which was launched in 2019 and will be valid until June 2023. It subsidises improvements in technology in industrial equipment and processes, as well as the implementation of energy management systems, to reduce consumption and costs of companies, increase their competitiveness, economic activity and the creation of jobs.
The government has amended the law on energy efficiency to facilitate investments in projects to increase the energy performance of buildings with European grants as financial collateral; and to promote the installation of smart meters; improve households’ access to energy consumption data.
The government has announced a programme to subsidise households seeking to install heat pumps and allocated €15 million to it. Also, it is promoting thermal insulation for households (receiving €500 million out of the EU stimulus package) from September 2022.
The government awarded £15 million to support innovations that make heat pumps cheaper and easier to install to accelerate their roll-out under the Heat Pump Ready programme and aims to increase deployment of heat pumps to 600,000 installations per year by 2028. Other actions include zero-rating VAT for the next 5 years on the installation of energy saving materials, including insulation and low carbon heating. It increasedthe funding available under the Public Sector Decarbonisation Scheme to upgrade public buildings (now a total of £2.5 billion). Through the Help to Heat scheme the government is taking actions to improve energy efficiency in low-income households: in April 2022, the government started providing grants in the order of £5000-£6000 to encourage property owners to install low carbon heating systems (eg heat pumps, biomass boilers) through the Boiler Upgrade Scheme (BUS); it allocated £ 1.5 billion to support energy efficiency upgrades in low-income households with poor energy efficiency rate (D or lower).
4. Policies to accelerate the roll-out of renewable energies and clean tech solutions
In REPowerEU, the European Commission set the 2030 target of renewable energy capacity to 1,236 GW tosave up to 21 bcm of gas per year, introduced a new target on the sustainable production of biomethane of 35 bcm by 2030 as a cost-efficient path to reduce imports of natural gas from Russia and a more ambitious target of 20 million tonnes of renewable hydrogen, of which 10 produced domestically and 10 imported through priority corridors by 2030. On 20 July 2022, the European Commission amended the Temporary Crisis Framework to “help accelerate the rollout of renewable energy as well as the decarbonisation of industries, in line with the REPowerEU objectives” by providing additional support until 30 June 2023. Under this framework, EU countries will be allowed to set up schemes for investments in renewable energy (ie solar, wind, renewable hydrogen, biogas and biomethane), storage, renewable heat (including heat pumps). Crucially, it introduced simplified tender procedures to fast-track the otherwise long permitting process, from construction permits to environmental impact, site identification, assessment, and spatial planning.
In March 2022, the federal government launched a €1.2 billion package of measures to accelerate the energy transition and shield consumers from high energy prices Measures include efforts to increase the production of renewable electricity from solar and offshore wind plants, and renewable heating and cooling. The package aims to accelerate the deployment of solar PV by e.g. a VAT reduction from 21% to 6% for investments in solar panels, solar boilers and heat pumps for homes less than 10 years old (measure valid until the end of 2023). Then, it includes a programme to increase the deployment of EVs by supporting deployment of smart EV charging stations (and solar PV) at the train stations of Belgium’s national rail network. There are also measures to support the deployment of large-scale floating solar PV systems. In addition, the VAT on solar PV panels was reduced to 6% for 2022 and 2023. The package also aims to reduce the time needed to obtain permits and licences for onshore solar PV and wind generation projects. The package include as well plans to accelerate the development of the second offshore wind zone, repower the first offshore wind zone to increase its capacity, examine options for creating a third offshore wind zone and a push for deployment of a meshed offshore electricity grid linking the countries around the North Sea.
The government passed an amendment to the Energy and Building Act to simplify the permitting procedure especially for new solar power plants. The amendment allows the purchase a power plant with an output of up to 50 kW without a license, and institutes competitive tenders for biogas power-generating facilities with an output of 1 MW or more, with a total competitive installed capacity of 5 MW; small hydropower plants of 1 MW or more, with a total competitive installed capacity of 7 MW; wind power plants from 6 MW or with more than 6 sources of electricity, with a total value of competing installed capacity of 30 MWe. The goal is to achieve renewable energy production capacity of 42 MW.
The government has sped up the construction of two offshore wind energy islands. One will be based in the North Sea, with 3GW capacity, and one in the Baltic Sea (on Bornholm), with 2GW capacity. On 18 May 2022, Denmark, Belgium, Netherlands and Germany signed a €135 billion offshore wind cooperation agreement in the Danish town of Esbjerg. The countries bordering the North Sea set the ambitious combined targets for offshore wind capacity of at least 65GW by 2030 and at least 150GW by 2050, and the combined targets for onshore and offshore capacity of green hydrogen of about 20GW by 2030.
On 25 August 2022, the government supported the draft proposal to accelerate the transition to renewable electricity by setting a renewable electricity target for 2030 equal to 100 percent of total electricity consumption (up from 40%). The aim is to ensure supply of renewables of 650 GW in January 2023, and at least 500 GW in both 2024 and 2025 through both wind and solar capacity.
The Minister for Energy Transition announced regulatory measures to respond to the risk of writing off 6-7 GW of solar projects and 5-6 GW of wind due to the rising costs of construction materials. These measures will consist of:
- Authorise renewable electricity production projects to sell their electricity at market prices for 18 months before charging the (lower) prices agreed in the tender.
- Consider the rising cost of materials for all future projects to produce renewable electrical energy as well as the production of biomethane. This will be implemented by allowing indexation of all the re-sold electricity.
- Freeze the reduction in tariffs for photovoltaic projects on buildings for the year 2022.
- Allow all renewable projects that have already won tenders to increase their power by up to +40% before their completion.
- Extend the commissioning time for biomethane production facilities that have obtained their environmental authorisation.
The government committed to accelerate the deployment of renewables by presenting a dedicated draft law and increasing the latest budget devoted to carrying out studies on the implementation of offshore wind farms by €25 million (an increase of 58% compared to 2022). In addition, it announced €1.3 billion in credits to finance the ecological bonus and the conversion premium to encourage the purchase of environmentally sustainable vehicles. Moreover, the government enacted two measures to increase biomethane production capacity via the revaluation of the feed-in tariff for biomethane to take account of inflation and the extension of the commissioning time for projects whose administrative procedures have been completed but which had fallen behind schedule compared to their construction. In the first six months of 2022, installations to inject biomethane into natural gas networks stepped up their production capacity to 7.6 TWh per year (up 18% compared to the end of 2021).
In April 2022, the government announced the Easter Package to set a 2030 renewable energy target of at least 80% of gross electricity consumption. In July 2022, the government revised the Renewable Energy Sources Act to enshrine the new objectives into legislation. The plan aims to add 10 GW per year of onshore wind energy (to achieve by 2030 a total of around 115 GW of wind capacity) and increase solar energy capacity to a level of 22 GW per year (for a total of 215 GW by 2030). Measures include the provision of new sites for the expansion of photovoltaics, the extension of municipality participation in onshore wind and photovoltaics, the development of more low-wind sites and the improvement of the policy environment for the expansion of roof-top PV installations. The Climate and Transformation Fund allocates €2.1 billion to subsidise the purchase of electrically powered vehicles and €1.94 billion for the construction of charging infrastructure. The German government has also introduced new financial incentives for consumers to invest in small rooftop solar photovoltaic installations, with a view to feeding more electricity into the grid instead of only using it for self-consumption. In 2022, the government has also put forward an additional round of ground-based and rooftop solar photovoltaic tenders and introduced a revised mechanism, adjusting the volume of electricity tendered for the additional round (ie if there is more volume tendered than bid, all bids can be awarded at the price offered). The Bundestag also passed the Wind-on-Land Act to increase the share of land for wind turbines to 2% by 2023.
The government aims to finance 250,000 small photovoltaics on roofs of households, businesses and which will consume their own energy for free. On 22 August 2022, the government passed its first law on offshore wind, the Offshore Wind Energy Bill, which set a target of 2 GW of floating offshore wind by 2030.
The government has streamlined the authorisation procedures to install wind and photovoltaic parks, onshore and offshore, and investing in storage systems to achieve a target of 8 GW of newly installed capacity from 2023 onwards. On 10 March 2022, the government authorised the construction of six wind farms, located in Puglia, Basilicata and Sardinia, with a total capacity of 418 Mw. The plants are in addition to two wind projects with total capacity of 65.5 MW authorised in February 2022. Italy also defined and later expanded the criteria for identifying suitable areas to install renewable energy (note that the exact map still needs to be finalised), it simplified the authorisation procedures for electricity production plants powered by renewable sources and extended the deadline for starting work. As of 31 May 2022, the Minister for the Energy Transition Roberto Cingolani announced to the press that new estimates produced by the country’s transmission system operator’s (Terna) put renewables capacity ready to be connected to the power grid at 8.3 GW, of which 5.1 GW expected to be in operation already by 31 December 2022. The minister underlined how this new installed capacity equals more than doubles (2.5 times) the sum of the previous two years, combined. In August 2022, Terna’s CEO Stefano Donnarumma reported that the requests for connection to the electricity network by renewable energy plants reached 280GW, about four times the 2030’s national targets for renewables. On 8 August 2022, the European Commission has approved a scheme to support the construction and the operation of new or converted biomethane production plants to be injected into the national gas grid for use in the transport and heating sectors.
The scheme is partly funded through the Recovery and Resilience Facility and will run until 30 June 2026.
In May 2022, the government announced provisional results of the second Renewable Electricity Support Scheme (RESS) auction that lead to a pipeline of 10 community projects with total approximate capacity 414 MW of onshore wind and 1,534 MW of solar (roughly a 20% increase of Irish renewable energy generation). In August 2022, the government has increased the offshore wind target capacity to 7 GW, up from 5 GW by 2030, and it has as doubled the solar goal to 5.5GW and introduced a 2GW green hydrogen ambition. The government is expected to revise its Climate Action Plan by end 2022 to outline the steps needed to achieve these goals.
The government launched a package of measures that promote the purchase and installation of solar power stations, deployment of solar, wind farm and electricity storage batteries in businesses (€60 million), the installation of an offshore wind park in the Baltic Sea (€9.8 million), and the deployment of solar and wind power stations in public buildings (€30 million). Also, it intends to set up private charging infrastructure for electric vehicles in the yards of multi-apartment buildings, households and private companies, the replacement of biomass and fossil fuel boilers with technologically advanced installations, hydrogen production equipment from renewable energy sources, green building renovation wood component production, as well as investments in biofuel production technologies.
On 16 September 2022, the government announced wind energy targets of around 50 GW by 2040 and of around 70 GW by 2050 (the 2030 target is set at around 21 GW roughly 75% of the current total electricity consumption). This announcement builds on the coalition agreement struck in December 2021 that included a commitment to offshore wind energy, setting the objective of at least 4.5 GW generated by offshore wind turbines in operation by 2023 to reach 21 GW’s worth of offshore wind farms in operation by 2030. Also, it laid out ambitions for large-scale hydrogen production projects in the North Sea.
In April 2022, the government announced that the licencing of new onshore wind power projects will resume in cases where the local municipality agrees on the basis of a new framework for licencing. The latter increased local and regional involvement, better ensuring that environmental matters are taken into consideration, and introduced new deadlines to tighten the time span of planning and building a wind farm. Small-scale renewable energy plants (solar, wind, hydro) with total installed capacity of less than 1 MW do not require a licence. On 11 May 2022, the government presented a large-scale plan for offshore wind, with a target of allocating areas for 30 GW of offshore wind capacity by 2040. This corresponds to almost as much power generation capacity as in Norway today. On 6 December 2022, the government announced to make its first offshore wind tender awards by the end of 2023.
On 29 March 2022, the Council of Ministers adopted the assumptions for updating the Energy Polish Policy until 2040 aiming at increasing technological diversification and expansion of capacity based on domestic sources, including further development of renewable (and nuclear) energy sources. The first offshore wind farm is expected to start operating in 2026.
The government is still to adopt A draft law to update one of the most restrictive wind laws in Europe blocking investment in onshore wind since 2016, by which the minimum distance between wind turbines and houses must exceed 2km (against 500 metres to 1km in most countries).
On 21 September 2022 , the Environment Minister Duarte Cordeiro announced on 21 September 2022 that Portugal hads increased the target for its first offshore wind power auction to 10 GW in order to "move faster" on the nation's energy transition. With wind resource of 9 m/s, the capacity factor of the wind farm could reach 50%, translating in around 40 TWh of electricity produced annually in a country with less than 50 TWh/y of domestic needs. Also, the government introduced a new incentive to produce renewable energy in a self-consumption regime or by small production units up to 1 MW. The incentive consists of an exemption from IRS taxation up to the annual limit of €1000 of income from the transaction of surplus energy to the grid. The measure is estimated to cost €5 million in 2023.
The energy savings decree sets out measures to promote electric mobility, self-consumption, and the deployment of renewable energies. They include actions specific to self-consumption and its integration into the electricity systems, and the mobilisation of €1.4 billion from the 2022 General State Budget to the electricity sector to compensate for the loss of revenue due to the suspension of the generation tax (7%). Also, the acceleration of the processing of electricity networks, reducing the requirements, especially in the case of transmission infrastructures and those considered unique, such as the interconnections between the islands. The decree enables the incorporation of storage systems into a park of renewables –with capacity of 22 GW of wind and 8 GW of photovoltaic – and by reducing permits to modernise hydroelectric plants by adding electronic equipment to their electromechanical groups, making them more flexible and allowing them to be used as pumps. The government announced a new auction of 3,300 MW of wind and photovoltaic on November 22 with the aim of accelerating the process of electrification of the economy (estimating gas savings of 11,000 GWh per year). The government aims to allocate €150 million to boost storage and launched a proposal for a ministerial order that establishes the regulatory bases to grant aid to innovative energy storage projects hybridised with renewable generation. Finally, an administrative procedure is enabled so that the production facilities of renewable gases, such as biogas, biomethane or hydrogen, can be connected to the network of gas pipelines for transmission and distribution, so that they displace the gas of fossil origin.
In its energy security strategy, the government aims to increase renewable energy capacity by 15% by 2023. It aims to deliver 50GW offshore wind power by, eg cutting permitting procedure times, fast-tracking projects, bringing forward up to 5GW of floating offshore wind by 2030, and by investing up to £160 million in ports and supply chains and £31 million in R&D. For solar, they expect a five-fold increase in deployment by 2035 up from the current 14GW of solar capacity and established a 70 GW solar PV target for 2035 in the new British Energy Security Strategy. . The government plans to achieve this by, eg easing the regulation around land use for ground-mounted solar, simplifying planning processes, reducing the VAT on solar panels installed in residential buildings, facilitating access to finance.