EU outlines plan to reduce energy dependence on Russia

European Commission confirms greater role of renewables and member states’ ability to consider ‘windfall taxes’

EU commissioner for energy Kadri Simson unveils the EU's plans
EU commissioner for energy Kadri Simson unveils the EU's plans

More renewables, diversification of gas supplies and energy efficiency will be key elements in the EU reducing its dependence on Russian gas, according to the European Commission.

However, the Commission confirmed that member states can consider temporary taxes on so-called ‘windfall profits’ – made by electricity generators while energy prices are high – a measure recently criticised by wind power industry groups. It is unclear whether such taxes would fall on renewable energy generators.

The Commission today (8 March) outlined a plan to make Europe independent from Russian fossil fuels before 2030. This includes reducing EU demand for Russian gas by two thirds by the end of the year.

It also vowed to publish a plan to speed up permitting for renewables projects – such as wind farms and solar arrays, as well as grid infrastructure improvements – in May.

EU commissioner for energy Kadri Simson said: “It is time to treat these projects as being in the overriding public interest – because they are.

“We recommend member states create ‘go-to areas’ suitable for renewables. We will publish recommendations to speed up permitting and we will change our current rules if they are holding us back.”

Windfall taxes

Industry bodies WindEurope and the Global Wind Energy Council (GWEC) do not support windfall taxes, and claimed that such a measure would undermine investments in new renewables.

WindEurope warned that "a misguided use of the clawback measures would create market distortions, deter investment and derail the urgently needed expansion of renewables".

In a recent joint statement – published following the International Energy Agency suggesting windfall taxes could reduce EU energy dependence on Russia – WindEurope and GWEC wrote: “Past examples in Spain, Romania, Bulgaria and Italy are resulting in market distortions, deterring investors, and failing to meet the stated objective of protecting consumers – all while at times leading to more emissions. 

“They freeze new investments, which in turn means less renewables and less energy security.”

Instead, the two groups suggested using windfall taxes on fossil fuel companies to alleviate the impact on consumers and businesses during times of high energy prices.

Project permitting

However, WindEurope and GWEC have long called for improvements in project permitting, with the former highlighting the issue as a key roadblock to wind power growth in Europe.

In their statement, they wrote: “Only streamlined permitting procedures will allow for the acceleration of renewable energy deployment that is urgently needed to increase energy security in Europe and countries around the world. 

“These permitting changes are actions that can be taken now to create an immediate impact for Europe’s renewable energy market.”

The European Commission’s plan follows Russia's invasion of Ukraine.

The EU has already imposed economic sanctions against Russian individuals and companies, while also offering financial and humanitarian support to Ukraine and protection schemes for refugees.

Meanwhile, Germany has paused certification of the Nord Stream 2 gas pipeline from Russia. And Russia’s deputy prime minister Alexander Novak said Russia could cut natural gas supplies to Germany via the existing Nord Stream 1 pipeline.

Major players in the wind power industry have announced plans to withdraw from Russia and to ensure the safety of employees in Ukraine.

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