What does the International Energy Authority propose so that the European warehouses do not run out of gas?

By Chrysostomos Tsoufis

With tanks full, lame crooked, this winter for Europe will come out without gas supply problems (the price is a completely different issue). But in 2023, as the International Energy Authority warns, if Europe leaves things to their fate, it will find itself with a deficit of around 27 billion cubic meters (bcm). A deficit that if not addressed, then in December 2023 the warehouses of Europe they will be only 30% full from 90% today.

In a report brought to the Commission’s attention, the Energy Authority assumes that in 2023 no Russian natural gas will enter Europe from the 60bcm this year.

The Chinese dragon

In addition, the ….Chinese Dragon will wake up and begin to absorb again amounts of natural gas equal to those of 2021 and will therefore operate in direct competition with the old continent.

Third assumption is that next winter’s temperatures will return to normal levels for the season, in contrast to this year’s mild winter.

In its 38-page report, the Authority makes a series of proposals that can be implemented by 2023 and close this gap. The first group of measures has to do with efficiency.

The authority proposes to incentivize renovations at European level to accelerate the rate of building renovation from 1% to 1.7%. Emphasis should be placed on vacant buildings, working-class housing and supporting lower incomes to reduce energy poverty.

Device replacement incentives

It also suggests incentives to replace inefficient electrical appliances and the installation of smart thermostats which alone can reduce heating costs by 10%.

Emphasis must also be given to the public sector. For example, in street lighting the authority’s proposal is to do like Latvia and install only LED lamps.

Informing citizens to change their energy habits is considered important. For example, reducing the average heating temperature in European buildings from 22 to 21 degrees, would lead to a saving of 10bcm, i.e. 37% of the 2023 gap.

Another proposal is for consumers to receive real time information through devices installed in their homes about their consumption so that they can adjust it accordingly.

Talk about zero VAT

The installation of heat pumps is considered an important intervention as it is estimated that 1/3 of natural gas consumption in Europe is intended for heating. Of course it is emphasized in the report that incentives must be given because the costs are significant. One solution could be zero VAT as is the case in England and France.

Accelerating renewables licensing and incentivizing natural gas exporting countries such as Algeria, Egypt and Angola not to flare gas they cannot use and to improve their facilities to limit methane leaks, to export these quantities are 2 more proposals of the Authority.

The cost of the proposals amounts to €100 billion, which is less than half of the package of measures against the energy crisis that Germany received alone.

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