The European Green Deal will result in a considerable transformation of the continental and Italian power combine with a major contribution from renewable power and electrification. However, these will be unable to completely cowl power wants, particularly in some sectors, forcing us to contemplate and analyze the position of molecules throughout the system, additionally in gentle of the power disaster.
The fuel disaster in Europe
In 2021, pure fuel consumed within the European Union was roughly equal to 400 billion cubic meters of fuel, consumed primarily in three sectors: electrical energy, residential and business. To fulfill your request, the EU needed to depend on imports, with a decisive position of Russia which contributed to round 40% of European imports (equal to round 155 billion cubic meters in 2021). However, from late 2021 onwards fuel grew to become a consider unprecedented geopolitical tensions following Russia’s battle in Ukraine. Over the course of 2022, Moscow intentionally decreased its fuel provides (-80 billion cubic meters in 2022) to EU nations with the goal of fragmenting the European entrance, caught between two challenges: the dearth of volumes e the rise in costs.
Faced with file costs, European governments have allotted round 650 billion euros from September 2021 to January 2023, based on Bruegel’s analyses, to guard residents and corporations. This strategy, which supplied principally common subsidies, nevertheless is just not replicable and fiscally sustainable. For this purpose, it’s essential that governments implement a supportive fiscal coverage and worth safety targeted on essentially the most weak residents and strategic corporations.
Regarding the necessity to safe various volumes to the Russian ones, European nations have rediscovered the significance of power safety and diversification – one of many pillars of the REPowerEU plan along with accelerating the transition. The EU managed to beat the disaster because of the decisive contribution of liquefied pure fuel (LNG) – particularly American. Italy has been in a position to profit from a extra diversified community and its stable political and power ties with historic and new companions within the Mediterranean space, primarily Algeria. In gentle of those traits and the reconfiguration of power flows, Italy has expressed the ambition of turning into an power hub and bridge between Africa and Europe.
Since the outbreak of the disaster, the position of power demand in response to doable shocks has acquired central strategic significance. European governments have determined to cut back fuel demand by 15% in comparison with the typical of the earlier 5 years with a purpose to cut back stress on costs. This coverage continued in 2023 (roughly -20% in comparison with 2021) because of larger power effectivity, a rise in inexperienced applied sciences but in addition milder temperatures. Furthermore, the economic sector additionally performed a decisive position, by means of a containment of manufacturing. Despite a narrowing of the imbalance between provide and demand and decrease costs, demand for fuel within the industrial sector doesn’t seem to return to pre-crisis ranges. In January 2024, fuel consumption within the industrial sector was decrease (17%) than in January 2021. All this raises doubts and uncertainties concerning the competitiveness of European business and the structural nature of this decline with necessary sociopolitical and financial penalties.
The street to the European power transition
There has been rising political dedication to the environmental dimension of fuel, particularly concerning methane emissions. In truth, methane has a climate-altering content material that’s 80 instances extra highly effective than CO2. Reducing methane emissions is without doubt one of the quickest, most possible and economical actions to cut back world warming, because of present applied sciences. Precisely because of this, after launching the Global Methane Pledge throughout COP26 in Glasgow in 2021, in April 2024 the EU lastly accredited the methane regulation, which goals to cut back methane emissions from the oil and fuel sector by means of repairs and bans on flaring and venting. The most related side of the regulation is the inclusion of requirements and necessities equal to European ones additionally for imported volumes given the robust European and Italian dependence. Also given the reference to methane emissions within the PNIEC draft, this side can and must also be one of many parts of Italian power and international coverage in its motion within the Mediterranean.
At the identical time, the acceleration of local weather insurance policies, along with costs above the historic common, is anticipated to result in a extra fast discount in fuel demand within the coming years. In truth, the Fit for 55 bundle assumes a 30% discount in European fuel demand by 2030 in comparison with 2019 ranges, whereas the REPowerEU plan will result in an extra discount of 100 bcm by 2030, if totally carried out.
Nonetheless, molecules won’t disappear from the power combine, particularly in some sectors, equivalent to heavy industries and maritime transport the place electrification is just not a possible answer. For this purpose, governments and corporations are contemplating the event of hydrogen. In April the European Parliament accredited reforms to develop the hydrogen market. Despite the dearth of a nationwide hydrogen technique, Italy aspires to develop into a transit nation for clear hydrogen from North Africa to continental Europe. However, it’s mandatory to make sure that the manufacturing, transport and consumption of hydrogen truly brings environmental advantages. For this purpose, it’s important to handle the problem of emissions linked to your entire worth chain. Only on this approach will molecules assure the decarbonisation of Europe.