Think tank urges EU renewables acceleration to protect against inflation

Renewable energy is already protecting the EU against even-higher inflation as the bloc has avoided EUR 11 billion (USD 10.8bn) in gas costs since the start of the war thanks to its record growth in wind and solar, according to energy think tank Ember.

Ember said on Monday that backing the REPowerEU proposal’s increased targets for renewable energy and energy efficiency is “the sensible option for Europe’s energy security, strained government budgets and consumer energy bills.”

Wind and solar generated a record quarter of the EU’s electricity since March, the organisation said. These resources produced 345 TWh in the March-September period, removing the need for the use of EUR 99 billion of natural gas to generate that electricity. Wind and solar generation was up 39 TWh or 13% year-on-year, which translates into 8 bcm of gas savings, or EUR 11 billion in avoided gas costs, according to Ember’s estimates.

The think tank said that fossil fuels have led to the biggest inflationary shocks in Europe since World War II. At the same time, gas was being encouraged as a “bridge fuel” and the EU was highly dependent on Russian gas imports. Russia’s share in the EU’s gas imports even increased after Russia’s occupation of Crimea in 2014 and Nord Stream2 would have further boosted import capacities, it said.

“Betting on gas as a bridge fuel and holding back on expanding renewable capacities are the main causes of Europe’s energy crisis,” according to Ember’s paper.

The think tank warned against repeating past mistakes through the development of new gas infrastructure. As there will be low additional LNG supply in the near term, a gas diversification strategy is not expected to solve the energy cost crisis in the next three to five years, it said, and it could create a risk of oversupply.

According to Ember, RePowerEU’s increased ambition would provide certainty for policymakers, businesses and financial institutions to accelerate clean energy deployment and help bring quick results for the next three winter seasons.

While the European Parliament backed the new 45% renewable energy target, the Council has yet to start discussing it.

(EUR 1 = USD 0.984)

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