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Russian President Vladimir Putin is playing hardball with the European Union – cutting gas deliveries to some of Russia’s best customers in a howl of rage over sanctions imposed after invading Ukraine.
It is putting enormous political pressure on governments, threatens to leave Europeans freezing if this winter turns out to be cold, and potentially undermines the bloc’s climate goals as countries switch from gas to coal. It could even push the continent into recession.
Simone Tagliapietra, analyst at the think tank Bruegel, calls Russia’s “energy blackmail” policies.
Only 40 percent of the normal amount of gas is flowing along the undersea pipeline from Russia to Germany’s Nord Stream, which is affecting deliveries to France, Italy and Austria, as well as Germany. Russia’s gas export monopoly Gazprom has already halted all deliveries to Poland, Bulgaria, the Netherlands, Finland and Denmark after energy companies in those countries refused to bow to Kremlin demands to pay for deliveries in rubles.
In response, some countries are planning to turn on coal-fired power plants.
“It must be recognized that Putin is reducing gas supplies to Europe little by little, also to increase the price, and we must respond with our measures,” German Economy and Climate Minister Robert Habeck said on television. interview at the end of Sunday, adding that “it is a tense and serious situation”.
Austria plans to cover a closed power plant to burn coal again.
Poland intends to subsidize coal used for domestic heating.
The Netherlands decided on Monday to abandon previous plans to limit output from its four coal-fired power plants.
“If it weren’t for special times, we would never have done this,” said Climate Minister Rob Jetten.
Italy’s government is planning a crisis meeting on Tuesday and Prime Minister Mario Draghi has ordered two liquefied natural gas regasification units and has been in talks with countries such as Qatar, Angola and Algeria to sign gas supply agreements in a desperate attempt to secure supplies in the event of a Russian shutdown.
Brussels wants to project confidence, but the concern is clear.
“We take the situation we are in very seriously. But we are prepared,” European Commission President Ursula von der Leyen told a meeting with reporters on Monday. “We are in difficult times. Times are not getting any easier,” she added.
The race to burn coal to secure energy supplies is symbolically embarrassing for climate-conscious Europeans. But few expect this to steer the EU or its member states off course in their efforts to reduce greenhouse gas emissions.
In Germany, officials are convinced that the coal comeback will be short-lived and will not compromise the country’s path to zero coal power by 2030. Coal will act as a supply reserve for the energy sector, allowing country build up its gas stocks before winter. Meanwhile, the government is planning to quickly ramp up clean energy.
Russia’s invasion has strengthened political support for renewable energy in Germany, said Simon Müller, director of the Agora Energiewende think tank.
“This additional layer of urgency that we have now in the face of this situation helps provide the political impetus we need for some very important accelerations in renewable construction,” Müller said. The German parliament is considering 10 energy efficiency and renewable energy measures and Müller said the three-party coalition is broadly in line with the importance of removing barriers to green energy.
Green groups were also optimistic. “There are no plans in Germany at the moment to cast doubt on the coal exit date,” said Christoph Bals, policy director at the NGO Germanwatch.
But the need to quickly change the direction of scrap coal is adding to political tensions.
In Berlin, the conservative opposition criticized Habeck for allowing an increase in coal use and ruling out keeping Germany’s three remaining nuclear plants operating until the end of this year.
“I don’t understand why the green climate minister prefers to let more coal plants run longer than carbon neutral nuclear plants,” said Jens Spahn, deputy head of the Christian Democrats in parliament. said German television on Monday. The nuclear shutdown policy was adopted by her former party leader, Angela Merkel.
The policy is also causing stress within the ruling coalition.
“What is needed is to keep the remaining three nuclear plants running longer,” said Bijan Djir-Sarai, secretary general of the liberal Free Democrats. “This is a fact that the economy minister cannot simply ignore.”
Admitting the step was “breaking a taboo”, Habeck said coal is still better than reviving atomic energy, arguing that a change in nuclear policy would only have an impact at the end of next year – too late to help this winter. He was supported by Chancellor Olaf Scholz, who said in an interview published on Monday that “nuclear power will not help us now, not in the next two years, which is what matters.”
Political leaders are urging their people to save energy and cut gas use as governments work to increase storage levels to allow the mainland to face a Russian winter gas cut. As a last resort, they are considering gas rationing.
A disruption in gas supplies would almost certainly push the bloc into recession. The European Central Bank has warned that the euro zone would contract by 1.7 percent next year if Russia completely turns off the tap.
“Disruptions in energy supplies and low possibilities for immediate replacement of Russia’s gas supplies would likely require some rationing and reallocation of resources, resulting in production cuts in the eurozone, in particular in energy-intensive sectors,” the statement said. Bank. predicting that if that happened, the bloc’s economy would recover next year.
But the ECB also issued a warning to Putin.
“Regarding the Russian economy, the scenario presents a severe recession with a contraction in production similar to the contraction experienced when the Soviet Union collapsed.”
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