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REPowerEU

REPowerEU is a European Commission proposal to end reliance on Russian fossil fuels before 2030 in response to the 2022 Russian invasion of Ukraine.[1]

REPowerEU is defining the need and supply of energy consumption in the European region, focusing on sustainable development and green energy production, also reducing the reliance of the region on other states, which can help in improving balance of payment (B.O.P) of European Union as well. This programme is making energy products cheaper for the community to be prosperous as high cost of energy leads towards poverty[2] Moreover, ensuring security of the energy resources, as during the war between Russia & Ukraine, Russia tried to use fossil fuels as a weapon to divide the region but with the help of this "REPowerEU" initiative European Union trying to create harmony among the Member States, so the Member States are more united than ever before. Moreover, to diversify the energy supplies to reduce the monopoly of a single largest supplier to overcome the geopolitical situation as in 2021of total gas consumption in Member States, Russia supplied 45% of it,[3] which gave them position to use it as a weapon against European Union.

History of EU energy demand

From the ancient time, energy has been the major factor for the survival of mankind. Since the early era, it is considered that those nations, which have ample energy sources rise as the world power. It is considered, Chinese used fossil-fuel for lighting and heating almost 2000 BC.[4] So the mankind has realized the importance of energy sources, officially the fuel was successfully drilled in 1859 in North America, since then the race triggered between the nations to find oil resources. It is considered, those nations who have sufficient means of energy, considered powerful nations in the world e.g (United States, Russia, Saudi Arabia etc) Like other part of the world, The European region faced severe shortage of energy resources,post world war II, As the Industry has to shift from arm related goods to mass consumers goods, which created huge demand of consumable goods, leads to high demand of electricity for the production purpose.[5]

The conflict between Ukraine and Russia played crucial role in the shortage of energy resources in EU Member States, which make the situation more worsen for them and triggered huge inflation in the prices of energy products[6]

Background

There was huge debate was going on in the developed countries about the sustainable development and green energy, this slogan attains more attention after the full-scale war between Russian Federation and Ukraine. To mitigate the impact of Russian Federation in EU's Member States, The Repower EU plan, which was introduced by the European Commission in May 2022, intends to reduce the EU's reliance on Russian products, especially fossil fuels, which are mostly utilized by industries to make their finished goods and necessary to generate energy. Similar to that, this strategy would enable Europe to expand its capacity for producing green energy, which will lower carbon emissions and make the world more sustainable than it was ever before.

Key factor of change

This theory is being researched in the wake of the Ukraine-Russia full-scale crisis. The Russian invasion of Ukraine was a wake up call for the European Union's Member States to take drastic actions against Russia. Moreover, Russia threatened to stop or cut off Europe's supply of fossil fuels after this incident, forcing European society to step aside and act independently. European Union can manage without importing fossil fuel from Russia.[7] So, the EU redesign its approach toward the geopolitics of energy security and this was the beginning of new era, which highlighted a large number of security and scarcity of energy arises.[8] now it is considered that EU is not that much secure as it used to be in past due to some latest incidents, which are creating security threat in European Union.[9] In the same way, Gas security is a combine responsibility of Member States and the Commission, but sudden phase out of Russian gas, created supply crisis, which triggered the availability and affordability crisis in the market.[10] Sudden demand shock is being received from European's Member States to Russia. This decoupling phase has proven comparatively harder to Russia as EU not only manage to pops out from these crises but has done tremendous work on the green energy.[11] With the help of the REpowerEU initiative, the region is going to be self-dependent fully by the end of 2030 or the EU is going to minimize its reliance of Russia in the case of fossil fuels. It aims to establish new pipeline agreements and secure critical raw materials necessary for renewable technologies[12] Russian invasion to Ukraine in February 2022 sent shocking wave to EU either to be ally of Russia or get ready for the foe[13] Main objectives of this REpowerEU are to mitigate the role of Russian products in the EU market as they are having extremely worst experiences to rely on Russia, due to its strategic position and minerals are used as a weapon against EU. The conflict escalated pace between March and April 2022 due to the Russian demand from European customers to open an account at Gazprombank to pay the dues in rubles instead of euros or dollars. When EU buyers declined to accept this offer, after some time Russia cut off the supply through Yamal pipelines to Germany and Poland by the end of the year, its supply to the EU was less than 20%. Due to the war between Russia and Ukraine had severe economy-wide implications for the EU bloc as cut off supply from Russia unevenly disturb the energy prices throughout the Europe which disturb the whole market situation[14] It is decided in this amendment that europe as a whole should decrease the dependency of EU on Russia almost ⅔ by the end of 2030 but on the other hand Baltic states and north eastern European countries were more vulnerable as comparatively more developed countries they manage their need from LNG USA but the above mentioned states had to face worst scenario and their growth compromised significantly. To cure this issue they had to reorganize a new gas pipeline from Azerbaijan to meet the need of eastern Europe as situation was getting worse and worst. For this purpose, aggregate-EU is formulated to assess the total demand of the member states and try to manage the need with sufficient supply, the creation of aggregate-EU also play significant role in avoid unnecessary competitions among the members states to buy any commodity.[15]

Major segments

European Union's plan of REPowerEU, focus on three major segment, firstly, save energy, diversify the energy supplies to reduce the dependency of EU member states on Russia, Thirdly, accelerating the speed of green energy.[16] It will help Europe to minimize the usage of coal and transfer into renewable energy.[17] It is considered as the wind of change for Europe, to enhance self-reliance in every sector of energy, Moreover, It will improve the security of the energy sources. In the same way, a sufficient fund is assigned for research and development (R&D) in this project, which will open the new avenue of energy production. Which will bring significant change to the landscape of energy in the upcoming years.[18] Various actions have been taken into account,to reduce the aggregate need of the energy import, the cheapest and greener way to reduce the demand of energy is "saving" to save energy various approaches have been applied in the region to minimize the need of energy products (e.g, Insulation, incentive on smart products to get the optimal use of resources) in the same way to enhance the efficiency of the energy. so far 18% of the Russian dependency is being reduced in gas demand by august 2022-march 2024 taking certain actions.[19] This reduction in consumption also help in improving the storage capacity, which mitigate the risk of blackouts or energy shortage. Due to the higher demand of gas, storage capacity remain almost 36% during 2016-2020 but on 1st April 2024, almost 60% gas been stored in the storing area,[19] which is significantly higher and also a milestone, now there are less chance of gas shortage, which leads towards the prices hike of the energy resources, which can help in stabilizing the economy. A revision of energy efficiency directives in September 2023, also help in additional saving of almost 12% by 2030. In 2022, final energy consumption recorded 2.8% reduction in gas usage, which will leads towards its goal.[20]

Diversify Energy Supply

Since the adoption of "REPowerEU" plan, the process of phase out Russia from importing fossil- fuel is diversifying energy supplies (Gasoline). In 2021, aggregate demand of EU was cover by Russia almost 45% the remaining part was imported from rest of the world but in 2023 this ratio has decreased dramatically to 15%, which shows the commitment of European commission to reduce the reliance of Europe on Russia.[21] In April 2023, under the guidelines of EU commission, launched aggregate demand and supply programme to meet the total demand of Eu's 27 member states, which will bring harmony among the Member States, leads to tackle the situation better than individually. This plan will enable Europe Union to create interconnection with United Kingdom, Western Balkan and North African countries to find alternative energy sources, including liquefied natural gas (LNG) and renewable energy agreement[22] due to this price of energy has been decreased in 2024 around 3.3%[23]

Produce Clean Energy

European Union Commission's programme "REpowerEU" has increased the pace of various projects to produce clean energy domestically, which enhance the security of energy and take the European Union toward the decarbonisation of economy. Moreover, to avoid this scenario in future the EU commission suggests finding another modes of energy, most precisely focus on local resources to produce and try to adopt sustainable development, which leads toward the green energy deals.

Solar and wind power

For this purpose, various other options are being considered such as solar panels to produce energy domestically and consume it directly. In 2021 almost 164 GW electricity was produced with Solar panels,40 GW added into the grid and during the financial year of 2022. In 2023, 56 GW is added in to the national grids so in two years period it has reached the figure of 260 GW moreover, it is expected till 2030 this capacity will reached 700 GW.[24] Wind mill is also an old age version to produce energy but now intensive attention is given to this model of power production a huge amount has been invested to get positive results from these models. Globally, Since 2012 each year on average 12% increase has been seen in the growth of wind energy, which is quite a significant increase . Due to the decline of the cost of wind projects, most of the states are planning to install latest windmill to produce energy. During the 1980's cost per KW used to be almost $4800 but the latest figure shows that now its almost $1800 per KW so mostly public institutes are investing in this kind of energy, in the same way it is also going toward green deals to achieve its milestone. In 2023 almost 1000 GW is being produced in the world, Moreover in the USA only is producing 150GW through wind projects. In the European union specific attention is also given to wind projects. It has a high capacity almost 50% of the productivity of the wind turbines, moreover, these are also suitable for the conditions of the Europe to produce in remote areas as it is having space to install in the rural areas and energy can be brought to the urban parts of the countries to consume it. According to the WindEurope's central report 323 GW of the energy capacity installed in the Europe till 2030 and the budget is €239 bn. This industry also produces jobs to almost half a million of people, which is quite significant to reduce the level of unemployment in the EU region. Solar energy is also playing significant role in curbing up the deficiency of energy. The whole project is run under the supervision of EU Solar Energy Strategy which have three flagship initiatives such as, -European Solar Rooftop Initiative, to tap into the potential of rooftops to produce clean energy -EU Large-Scale Renewable Energy Skills Partnership, launched in March 2023 to create new green jobs and support the development of a skilled work force -EU Solar PV Industry Alliance, launched in December 2022 to diversify imports of solar components and expand solar PV manufacturing in the EU Repower EU is also going to play vital role in reducing Energy cost as it is not only work on producing it but also help to get the optimal utilization of the resources. It is helping in reducing cost of energy by minimizing energy waste such as line loss, producing clean energy is also important so for this purpose, only those projects are being considered which can also help in creating sustainable development, to minimize the cost of energy, diversifying the energy suppliers is also part of this project to minimize the impact of any major supplier, now EU Commission in planning to have number of supplier with perfect competition instead fulfilling the need from one big supplier[25] Accelerate renewable development, promoting circularity and enhance the capacity of energy.[26]

Challenges

Europe's "REPowerEU" programme, have significant challenges which can slow its pace toward the goal. one for most challenge is insufficient policy support, uncertainty is created in the absence of competitive auctions in the utility scale projects,[27] which is creating negative image in the mind of the stakeholders. less transparency in the public projects, in some countries limited audit of the resources may dented its credibility, which is the most important factor in the eyes of private investors, they feel less secure while having less access and limited trans parity. which leads toward very low interest for the developers and vendors. Secondly, permitting procedure is quite complex and lengthy which is time consuming and vast number of bidders gradually loss their interest in the projects of "REPowerEU" due to being time intensive of permitting. There is huge risk factor of moving goods, which can be a vital challenge in supply chain management as most of the raw materials and technology devices are importing form the other worlds, which can increase the initially cost of the projects. So there is dire need to improve supply chains or reduce the dependency on other economies. Moreover, there is no specific fund for this project, for each transaction funds have to approve from the Recovery, Resilience Facility RRF,which was established during the Covid -19 so leftover funds is the major source of monetary needs. Moreover, It is quite complex to acquire funds, which is time consuming and intensive clerical work is required, which create hurdles in the pace of this project. since the Russo Ukraine war 2022 in the short run decarbonization was decreasing for the limited period but in the long run it leaves positive impact on decarbonization due to the mega structures.[28] EU has shown resilience, during the phase of decoupling of Russia and European Union, as not only EU has survived but also achieve some great milestone in the form of green deals, in the same way, REPowerEU has done its role significantly to drop down the unemployment level in the European Union.[29] If EU Commission, successfully complete this project, it is going to be the beginning of new era as it will reduce the Eu's dependency on other countries, moreover, accelerate the transition towards green energy, expanding its arms, while minimizing the decarbonization can play vital role in sustainable development.

See also

References

  1. ^ McGrath, Matt (8 March 2022). "Climate change: EU unveils plan to end reliance on Russian gas". BBC News.
  2. ^ V, Dinu. Dinu, V. (2023). Clean, Diversified, and Affordable Energy for the European Union in the Context of the REPowerEU Plan. Amfiteatru Economic Journal, 25(64), 654-658. https://www.econstor.eu/bitstream/10419/281724/1/Article_3223.pdf. {{cite web}}: Missing or empty |title= (help)
  3. ^ "REPowerEU". commission.europa.eu. 18 May 2022.
  4. ^ Tutuncu, A. N. (2020). Fossil Fuels. The Oxford Handbook of Energy Politics, 23
  5. ^ Bradbury, J. J. C. SEVERE ELECTRICITY SHORTAGES IN EUROPE. In Workshop Proceedings: Environmental and Social Impacts of an Electricity Shortage.
  6. ^ Ari, Mr Anil; Arregui, Mr Nicolas; Black, Mr Simon; Celasun, Oya; Iakova, Ms Dora M.; Mineshima, Ms Aiko; Mylonas, Victor; Parry, Ian W. H.; Teodoru, Iulia; Zhunussova, Karlygash (29 July 2022). Surging Energy Prices in Europe in the Aftermath of the War: How to Support the Vulnerable and Speed Up the Transition Away from Fossil Fuels. International Monetary Fund. ISBN 979-8-4002-1459-2.
  7. ^ McWilliams, Ben; Sgaravatti, Giovanni; Tagliapietra, Simone; Zachmann, Georg (2023). "The EU can manage without Russian liquified natural gas". Bruegel Policy Brief. {{cite journal}}: Cite journal requires |journal= (help)
  8. ^ https://www.researchgate.net/profile/Andreas-Goldthau/publication/373555094_The_EU_Energy_Crisis_and_a_New_Geopolitics_of_Climate_Transition/links/64f1819b4a2a2214db2f059a/The-EU-Energy-Crisis-and-a-New-Geopolitics-of-Climate-Transition.pdf
  9. ^ Kuzemko, Caroline; Blondeel, Mathieu; Dupont, Claire; Brisbois, Marie Claire (1 November 2022). "Russia's war on Ukraine, European energy policy responses & implications for sustainable transformations". Energy Research & Social Science. 93: 102842. doi:10.1016/j.erss.2022.102842. ISSN 2214-6296.
  10. ^ Joëlle Elvinger. "Special report 09/2024: Security of the supply of gas in the EU". European Court of Auditors
  11. ^ "European natural gas imports".
  12. ^ Taydaş, Anıl Ömer (24 August 2024). [Anıl, Ömer, Taydaş. (2024). 1. REPowerEU as a Crisis Response: Immediate Diversification and Green Transition. Ekonomi, işletme ve maliye araştırmaları dergisi, doi: 10.38009/ekimad.1502909 "REPowerEU as a Crisis Response: Immediate Diversification and Green Transition"]. Ekonomi İşletme ve Maliye Araştırmaları Dergisi. 6 (Özel Sayı 1): 79–86. doi:10.38009/ekimad.1502909. ISSN 2667-503X.
  13. ^ Djeghri, Billel (29 February 2024). [(2023). 4. The repowereu battle plan to end europe's dependence on russian gas. Ekonomìka Ukraïni, doi: 10.15407/economyukr.2023.06.053 ""]. Economy of Ukraine. 66 (6): 53–69. doi:10.15407/economyukr.2023.06.053. ISSN 2522-9478
  14. ^ Meyer, Cecilia Smitt (5 November 2023). "The EU Gas Purchasing Mechanism: A Game-Changer or a Storm in a Teacup?"
  15. ^ 9. "REPowerEU - 2 years on". energy.ec.europa.eu
  16. ^ 9. "REPowerEU - 2 years on". energy.ec.europa.eu.
  17. ^ . EU climate policy amid Russia's war in Ukraine: A critical overview of key REPowerEU challenges and trajectories towards net-zero.
  18. ^ (European commission 2022)
  19. ^ a b (EU commission report 2024)
  20. ^ "REPowerEU - 2 years on". energy.ec.europa.eu.
  21. ^ REPowerEU - 2 years on
  22. ^ Banas, Dmytro; Melnyk, Tetiana (1 July 2024). [Daniel, A., Banas., Tetiana, Melnyk. (2024). 2. Transformacja sektora energetycznego Unii Europejskiej. Problemy Ekorozwoju, doi: 10.35784/preko.6015 "The Transformation of the European Union's Energy Sector"]. Problemy Ekorozwoju. 19 (2): 293–308
  23. ^ EU Stats, 2024
  24. ^ "REPowerEU". commission.europa.eu
  25. ^ "REPowerEU: energy policy in EU countries' recovery and resilience plans". Consilium.
  26. ^ Is the European Union on track to meet its Repower EU goals? – Analysis
  27. ^ 13. Babić, Milan; Mertens, Daniel (19 September 2024). "Decarbonization under geoeconomic distress? Energy shocks, carbon lock‐ins, and Germany's pathway toward net zero". Regulation & Governance. doi:10.1111/rego.12634. ISSN 1748-5983.
  28. ^ https://libstore.ugent.be/fulltxt/RUG01/003/143/963/RUG01-003143963_2023_0001_AC.pdf
  29. ^ Mcwilliam, Zachmann (14 November 2024). "The EU can manage without Russian liquified natural gas". Bruegel | The Brussels-based economic think tank.
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