Between 2019 and 2022, the share of energy-related expenditure (excluding transport fuel costs) has increased on average by more than a third in the European Union, and has almost doubled in some Member States, according to the seventh edition of the annual report on the State of the Energy Union, which was published by the European Commission on Tuesday 18 October.
Taking stock of the EU energy sector in 2022, this year’s report is significantly different from previous versions due to recent geopolitical developments that have resulted in significant turbulence in energy markets.
It therefore highlights the considerable impact of the Russian invasion of Ukraine on the EU energy system, including on prices.
“There is a risk that a larger group of households could not be able to pay their energy bills, affecting not only low-income households, but also lower middle-income households and potentially beyond in some Member States”, warns the paper. In 2020, 35 million EU citizens (about 8% of the EU population) were already unable to afford adequate levels of heating.
LNG as an alternative to Russian gas
The report also notes that the share of Russian pipeline gas constituting EU imports has fallen from 41% in 2021 to 9% in September 2022. It rose from 45% to 14% when Russian liquefied natural gas (LNG) is included.
In response, the EU has specifically turned to LNG from other countries, bringing the share of LNG of the EU’s total net gas imports to 32%.
Another measure taken by the EU is to ensure that gas stocks are sufficiently filled for the winter. Regarding this point, the paper notes that the average occupancy rate was over 91% of total capacity in mid-October. Moreover, by 5 October, 14 Member States had already exceeded the 80% target set for 1 November (see EUROPE 12980/3).
Fossil fuel subsidies remain stable
Furthermore, the report indicates that fossil fuel subsidies have remained fairly stable throughout 2021, with decreases in subsidies for electricity generation through fossil fuels offset by increases in subsidies for fossil fuels in industry and transport.
Record year for solar energy
Regarding renewables, the paper notes that the EU produced a record 12% of its electricity from solar energy between May and August 2022, and 13% from wind energy.
“Early indications suggest that 2022 will be a record year for the European solar photovoltaics (PV) market”, the European Commission added, forecasting annual growth of 17–26% in the markets of the largest EU countries.
However, hydroelectricity production in the summer of 2022 was 14–11% lower than in previous years due to the drought.
The European Commission estimates that the share of renewables in the EU’s electricity mix should increase from 37% in 2021 to 69% in 2030.
See the report: https://aeur.eu/f/3ns (Original version in French by Damien Genicot)