Speech by Commissioner Simson at the Three Seas Business Forum: ‘Building a Balanced and Resilient Energy Sector in the Three Seas Region’

(Source: European Commission)

“Check against delivery”

Good morning everybody. It’s great to be here in Riga today.

We are going through an energy crisis that threatens our climate goals and energy security and independence all in one.

The ripple effects of the Russian aggression in Ukraine have kick started a huge change in our geopolitical environment. In recent days and weeks, Russia has again and again demonstrated that it is an unreliable supplier who uses energy as a political weapon – trying to single out targets across the EU. The disruptions in gas flows to a number of countries are clearly designed to undermine the EU’s unity and determination in the face of Kremlin’s invasion of Ukraine.

But the EU has remained united. Six packages of sanctions so far have been agreed on.

And remaining united is also extremely important for our energy security during this time.

That underlines the importance of events like the Three Seas Forum. Each member country faces a different energy challenge in this new context, but working collectively can enhance our energy security. Coordination is more important now than ever.

In this new political context, we cannot continue to feed the Russian war machine with our fossil fuel imports.

Instead, we need a plan to look forward. That Plan is RepowerEU: a blueprint to build a future based on a clean energy system without Russian influence.

A plan that builds on our Green Deal, not change the course of it.

Because it would not make sense to try and replace fossil fuels from Russia simply with fossil fuels from somewhere else. It would jeopardise our decarbonisation goals.

The Green Deal existed long before Russia made the decision to attack Ukraine. So we will stay on the same track but pick up the pace with REPowerEU.

To do that, the central element of our Plan is to boost renewable energy even further.

This means more renewable electricity to replace gas in power generation, heating and cooling, more renewable gases to help industry to shift away from gas.

We are proposing to increase our renewables target from the current 40% to 45% by 2030. To back this up, we proposed:

  • a Strategy for the solar sector to double today’s level by 2025.
  • a plan to accelerate the production of green hydrogen.
  • and an action plan to double the production of biomethane by 2030.

If we want to succeed, we need new tools and new approaches. And to find a way around what is preventing us from speeding up production and deployment. That’s why a key part of this Plan is our proposal on permitting procedures. Right now we are looking at almost a decade for some offshore wind projects to get off the ground. Far too long. And time we don’t have to waste.

Our aim is to simplify and prioritise. With our new proposal, renewable energy projects are considered as being in the overriding public interest. And we are also recommending that repowering projects and solar panel installations have shorter and simpler procedures.

And last, we are proposing that Member States can designate ‘go-to’ areas. These are places most suited for developing renewable installations and where the environmental risks are known to be lower. And the definition will be based on a strategic environmental assessment.

Once this is done upstream, individual projects will not need a separate assessment, meaning permitting procedures will be done much faster. In these areas, it shouldn’t take more than a year or six months for repowering projects.

Beyond renewables, diversification must be part of the approach. There is a clear risk to our short-term energy security.

Renewables and energy efficiency are necessary, but not enough. Right now, we can’t match the shortfall from Russian gas with these alone.

Winter is around the corner, and it will be a challenging moment. We are not just looking at high prices, there is a real risk that we do not have enough energy for our societies. We need to make sure the impact on citizens and industry is as low as possible. So preparation is key.

Energy storage is our first insurance policy. So we have introduced regulation to ensure that storage levels are filled up to 90% by November 1st each year.

The filling of storage is advancing well, despite the high prices. The EU-wide storage level is already above 50% of capacity, around six percentage points higher than last year at the same time.

We also need to be pragmatic and diversify Russian gas from other reliable sources and through smart investment.

We aim to replace 50 BCM of Russian gas with LNG supplies and 10 BCM with additional pipeline supplies.

And things are already moving in the right direction. Our dependence on Russian imports is already decreasing.

LNG imports are at record levels: 12.6 BCM were imported in April in the EU. This represents a 36% year on year increase for LNG.

Meanwhile, the share of Russian gas imports in the EU is already decreasing.

April 2021 it was 45%, compared with April this year at 31%.

If we look at pipeline gas alone, the reduction is even bigger, from 40% last year to 26%.

Our gas infrastructure and cooperation on security of supply allows us to increase LNG and let the gas flow to where it’s needed. The fact that Gazprom has cut off a number of Member States including Poland, Bulgaria, Finland, the Netherlands and Denmark – and the situation is stable, is proof of this.

I also want to talk about the EU Energy Platform – one of the key drivers of our effort to diversify.

The Platform will:

  •  aggregate EU gas demand,
  • Allow us to better and more efficiently use gas infrastructure, like LNG terminals
  • and carry out outreach to supply partners.

We are also working to set up a joint venture mechanism that will help us purchase gas directly and redirect it in a competitive way among interested Member States.

As part of the Platform, we have already established the first regional sub-platform for South Eastern Europe, to help Bulgaria and neighbouring countries. And they should be an example to follow. We want to see other regional platforms come out of the Three Seas Group as soon as possible. There’s no reason that the Baltic Region couldn’t be the next Group, so I’d really encourage the authorities and market actors to make the most of this avenue.

In terms of outreach to international partners, we are quite advanced with the United States, as well as Norway. Last week I travelled to Cairo where we signed an MoU with Egypt and Israel. I will also visit Azerbaijan in July. At the same time, we have intense contacts with Canada, Qatar, Algeria, and others.

Despite all of these efforts, uncertainties remain. That’s why Member States absolutely need to step up preparedness, update the contingency plans in place and conclude any outstanding bilateral solidarity agreements.

I am also giving priority to deliver a coordinated contingency plan for next winter and to provide guidance to Member States on how to organize demand reduction decisions, if it’s needed. So that we know what we will do depending on what happens.

There is no immediate risk to our security of supply, but if needed, we will handle it in the spirit of solidarity and minimising the impact on EU’s citizens and business. The EU is ready to deal with these developments. Already since last year we have been working hard to enhance our preparedness for gas disruptions – including the most serious scenarios.

 

REPowerEU is a plan for our security and independence in the EU. Individual countries and regions can build on what we have set out. Energy is now being used as a weapon on a daily basis. And as I said earlier, close cooperation is incredibly important to protect against it. Particularly for those countries that are most exposed to Russian threats.

The three Baltic States and Finland have historically been fully dependent on Russian gas.

And infrastructure is going to be key for energy security, for these countries in particular but also the wider EU.

Important developments either have been completed or are in the works.

The Baltic Pipe and GIPL.

A better interconnection between Lithuania and Latvia.

And the ENTSO-G assessment shows us that the FSRU to be installed in either Estonia or Finland latest in 2022 will be a huge help in removing dependence on Russian gas.

Aside from gas, electricity is also an area of security concern because the Baltic States are the last Member States with grids still dependant on third countries.

Synchronisation with the European continental grid is a priority, one that will be completed at the latest by the end of 2025.

And when it’s in place, it will create a more secure energy system as well as increasing renewables uptake in the region.

Ladies and gentlemen,

As I see it, these are the key drivers to reach a safe and resilient energy system.

I hope this gives you a clear direction of travel and a good basis for your discussion in a few moments.

Thank you very much for listening.

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