EU signals shift to coal, accuses Russia of ‘rogue moves’ on gas

In the words of Reuters’ Hannibal Hanschke the landfall facilities of the Nord Stream 1’s gas pipeline in Lubmin, Russia.

Contributors: Noah Browning and Nora Buli

Reuters reports from Brussels and Oslo.

As the gas market tightens and prices soar, the European Union will temporarily switch from natural gas to coal in order to deal with the slowing Russian supply, an EU official said on Wednesday.

European leaders have reacted angrily to Russia’s decision to slash the capacity of its Nord Stream 1 pipeline to just 40% of its capacity, deepening an energy standoff that erupted after Russia invaded Ukraine.

The International Energy Agency (IEA) has urged Europe to replace Russian energy supplies while increasing efficiency and renewables, including nuclear power, in order to deal with gas shortages in the region.

Fatih Birol, the head of the International Energy Agency (IEA), warned that as winter approached, Russia might continue to find reasons to cut supplies or stop them altogether. This supply cut is not intentional, according to Russia’s denials.

The Baltics could become a new flashpoint in the energy crisis.

As a retaliation for Lithuania’s blocking of rail shipments of Russian goods to Moscow’s Kaliningrad exclave, Russian President Vladimir Putin told Reuters that his country was prepared for Lithuania to be cut off from a common power grid by Moscow.

Russian officials have promised retaliation, but they have not specified what form it will take.

In light of Vladimir Putin’s actions, Europe will temporarily pursue fossil fuel alternatives to Russian gas, a senior European Commission official said, but these moves will not derail long-term climate change objectives.

EU official Elina Bardram told the Africa Energy Forum in Brussels that “the unlawful invasion by Russia of Ukraine has resulted in an emergency situation.” Bardram is the EU’s acting director for international affairs and climate finance.

As a result of the Putin administration’s “very rogue moves” to abruptly reduce Gazprom’s supply, she said, “we are doing some very important measures,” including increasing coal consumption.

Exploring other options

Concerns about winter energy shortages and inflation, as well as Europe’s resolve to maintain sanctions against Russia, have prompted countries to devise a series of contingency plans.

German Finance Minister Christian Lindner warned on Tuesday night that a severe economic crisis was imminent and emphasized the importance of finding new sources of energy to counteract a shortage that could last three or more years.

Nord Stream 1 and Ukraine deliveries remained steady on Wednesday, but the flow of Russian gas to Europe was significantly lower than last week, when Gazprom reduced capacity, citing technical issues as the reason.

ENI’s request for gas from Gazprom on Wednesday was only partially confirmed, according to a Gazprom spokesman.

Gas prices in Europe were around 127 euros ($133) per megawatt hour (MWh), down from this year’s peak of 335 euros but still up more than 300 percent from where they were a year ago.

Russia, which has already cut off some customers, is causing Europe to rush to fill its winter gas storage, which is now only 55% full.

After Germany’s BDI industry association said that a recession in Europe’s largest economy would be inevitable if Russia ceased gas deliveries, Lindner issued a warning to the world’s most populous nation.

Though sanctions have been placed on Russian oil and coal, the European Union and other developed economies have not yet banned gas imports.

The International Energy Agency (IEA) believes that rehabilitating nuclear power plants could provide a short-term solution to high energy prices and limited supply.

Nuclear power’s resurgence as a means of generating clean energy has prompted a review of potential investments in new reactors and the reopening of closed conversion plants for uranium.

Although this year’s $2.4 trillion energy budget includes record spending on renewables, the International Energy Agency (IEA) says it falls short of closing a supply gap and combating climate change.

Elaine Hardcastle and Jason Neely edited Matthias Williams’ writing.