BAKU, Azerbaijan, April 25. Europe will need coal-fired generation capacity in case of Russian gas curtailment in 2022, Julian Bowden, Senior Visiting Research Fellow at Oxford Institute for Energy Studies (OIES) told Trend.
“If for one reason or another there is a halt in Russian supplies in 2022, then LNG will not be able to compensate for the lost volumes. Europe will be able to find some LNG, but not enough. It will need to turn on coal-fired generation capacity, and try to ensure that nuclear and renewables capacity (wind and solar) is working well,” he explained.
Bowden reminded that the EU in March said that phasing out our dependence on fossil fuels from Russia can be done well before 2030. Intent is to remove around 100 bcm gas from Russia in 2022 through a mix of supply side and demand side actions.
“Scenario 1. The plan works. 100 bcm of Russian gas is replaced in 2022 through a mixture of more LNG and some more pipeline gas, plus reduced demand. By 2030, dependence on Russia gas is gone. This plan does not say whether dependence means zero imports from Russia, or whether a small volume is OK. let us assume here that a small volume is ok, say 10 percent of total demand or around say 50 bcma. We don’t know, but this is an assumption,” the expert noted.
In the Scenario 2 the Plan is too ambitious, says Bowden.
“Sourcing the planned additional 50 bcm of LNG in 2022 and 10 bcm pipeline gas is just too difficult. LNG is the key to the plan. Here EU will have to compete for LNG in the global LNG market, and there is not the volume of new capacity coming on-stream to allow this. There is some new capacity coming on-stream in 2022, but for the most part this is capacity which was not available in 2021 due to a series of maintenance and operational problems. In all, my judgement is that EU might be able to find an additional 30 bcm. On pipeline gas, there might be a small amount additional from Norway, and TAP will be giving a full-year of capacity. In all, perhaps 6-7 bcm might be possible, but not the 10 planned. Demand side actions might work naturally, through the price mechanism: with very high gas prices, consumption will be lower,” he said.
Of these 2 scenarios, in the main Bowden thinks (2) is more likely.
“Total curtailment of Russian gas exports is very unlikely in 2022. However, the EU intention for less Russian gas is very clear. By 2030, I think we will see much less Russian gas coming to Europe,” he concluded.
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