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BRUSSELS/OSLO June 22 (Reuters) – The European Union will temporarily shift back to coal to cope with dwindling Russian gas flows without derailing longer term climate goals, an EU official said on Wednesday as a tight gas market and soaring prices set off a race for alternative fuels.
European leaders have rounded on Russia as flows through its Nord Stream 1 pipeline were cut to just 40% of capacity, deepening an energy standoff after the invasion of Ukraine prompted Europe to impose tough sanctions on Moscow.
To cope with gas shortfalls, the International Energy Agency (IEA) said Europe must replace Russian energy supplies while boosting efficiency and renewables, including nuclear power. read more
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In a statement to Reuters, IEA chief Fatih Birol warned Russia might continue to find excuses to cut supplies or halt them altogether as winter approached. Russia has denied that its supply cuts are premeditated. read more
Germany, Italy, and the Netherlands have signalled that coal-fired power plants could plug supply gaps, even as Germany gears up to host a Group of Seven summit having reaffirmed a commitment to ambitious climate change goals. read more
Europe will temporarily pursue fossil fuel alternatives to Russian gas in light of President Vladimir Putin’s actions, a senior European Commission official said.
“The unlawful invasion by Russia of Ukraine has resulted in an emergency situation in the EU,” Elina Bardram, acting director for International Affairs and Climate Finance at the European Commission, told the Africa Energy Forum in Brussels.
“With the very rogue moves we are observing from the Putin administration in terms of Gazprom lowering the flow very suddenly, we are doing some very important measures, but all of those measures are temporary,” she added.
The measures would be phased out as soon as possible as the EU is determined to stick to its climate goals, she said.
“The EU’s 2030 and 2050 targets remain fully intact … while we may temporarily increase our use of coal, the long term direction is clear,” added Bardram, who headed the European Commission’s delegation to the 2015 Paris Climate talks.
EXPLORING ALTERNATIVES
Countries have outlined a series of measures to withstand a supply crisis to tackle worries about winter energy shortages and an inflation spike that could test Europe’s resolve to maintain sanctions on Russia.
German Finance Minister Christian Lindner on Tuesday evening said there was a danger of serious economic crisis and underlined the need for alternatives to overcome three or more years of energy scarcity.
A note by the Royal Bank of Canada expected the rate of filling up gas storages to slow down and for governments to take action to ease demand.
“Many countries appear to be re-thinking coal shutdowns”, it said, adding “we do not believe the situation can be rectified with supply-side measures only, and we do expect a significant demand side response.”
Another flashpoint in the energy crisis could come in the Baltics. President Gitanas Nauseda said Lithuania was ready for Russia shutting it out of a common power grid in retaliation for blocking rail shipments of some Russian goods to Moscow’s Kaliningrad exclave. read more
Flows of Russian gas to Europe via the Nord Stream 1 pipeline and deliveries through Ukraine were steady on Wednesday, but remained significantly lower than last week. Gazprom said it was cutting flows via Nord Stream 1 last week, citing technical issues.
Europe’s benchmark gas price was trading at around 127 euros ($133) per megawatt hour (MWh), below this year’s peak of 335 euros but still up more than 300% on its level a year ago.
Europe is scrambling to fill winter gas storage – now at 55% – as it…
Read More: EU signals shift to coal, accuses Russia of ‘rogue moves’ on gas