What do you know about the new REPower EU?

The new EU energy plan

Serious consequences have arisen from the invasion of Ukraine by Russia since last February, causing great uncertainty in Europe, mainly regarding energy.

As it has been repeated several times in the newspapers in recent months, the European Union must indeed face now more than ever the problem of its energy dependence, which binds it more and more to third countries. About 40% of the natural gas used by European nations comes in fact from Moscow.

For this reason, last week a new important action and investment plan was presented by the European Commission, the so-called REPower EU. This, as the official documentation states, will help “rapidly reduce dependence on Russian fossil fuels, accelerating the transition to clean sources”. In this regard, the President of the EU Commission Ursula von der Leyen said that this project will lead to a “new level of ambition”, supporting the Union in the enterprise of “saving energy, making it easier to abandon fossil fuels, and favoring the start-up of investments on a new scale “

The vice president of the European Commission Frans Timmermans also expressed himself favorably in this context, stating that “the best way to reduce prices is to buy collectively from alternative sources to Russian gas and obviously save energy”. He then added, “that the price cap — a ceiling on the price of gas — is an emergency measure”. However, in this way “it is not possible to make expensive energy accessible and at a good price”. We need to “find alternatives and different approaches”.

What REPower EU consists of

The project will operate on some fundamental pillars, namely energy saving and efficiency, the replacement of Russian fossil sources and the diversification of supplies, the increase in the use of clean energy, and the financing of new infrastructures. With regard to the last point, mainly gas pipelines and terminals for liquefied natural gas are considered.

Firstly, the European Commission plans to increase the share of energy from renewable sources to 45% by 2030. The percentage currently envisaged is in fact only 40%. To do this, it will be necessary to continue with actions aimed at increasing and accelerating the transition to clean energy, that is to facilitate the authorization procedures for green sources and related infrastructures. In particular, an ambitious idea has been launched, namely that of a solar coverage obligation for commercial and public buildings by 2025 and for new residential buildings by 2029.

As regards energy saving, the goal is to bring the percentage of energy stored from 9% to 13% by 2030. Subsequently, it will then be necessary to implement a diversification of supplies. According to estimates, of the 155 billion cubic meters of gas imported from Russia, 60 billion fewer could be purchased by 2022. This is thanks to agreements with countries such as the United States, Egypt or Israel or the increase in energy production obtained from nuclear and coal.

In short, thanks to the EU REPower, the 27 member countries will be able to create a platform for the joint purchase of gas, LPG, and hydrogen. There would thus be a joint procurement mechanism and a common approach to the supplying countries, as well as new investments in infrastructure related to gas and oil. It will be possible to finance gasifiers, and gas pipelines with the provision for hydrogen or the expansion of existing oil pipelines.

How the plan will be funded

Funding for REPower EU will mainly come from the Recovery and Resilience Facility, one of the key tools in the NextGenerationEU, namely the plan by which member states can obtain around 225 billion in loans.

The various National Recovery and Resilience Plans will therefore see the addition of new chapters, in order to channel investments towards the objectives indicated by the new European program. There will thus be specific recommendations for each Member State of the Union, which will be able to apply for the prerequisites not yet requested.

Under the current regulation, nations now have until August 31, 2023, to send the request, but once REPower EU is approved, countries will only have one month. Once this term has expired, the unused portion of funds will be made available to the States that request it. This is because, as explained by Timmermans, the money belongs to the European taxpayers and not to individual nations.

Finally, the use of the proceeds from the auction sale of the emission trading system quotas, or ETS, namely emissions allowances, was also proposed, as well as the transfer of funds related to territorial cohesion or agriculture. This is up to 12.5% of the national envelope of the Member States.

Possible problems

Firstly, the diversification of energy supplies can have high environmental impacts, mainly due to the production of liquefied natural gas which would now arrive in greater quantities in the European Union.

Furthermore, the problem of energy dependence would not be solved. Europe would move away from Russia as the main supplier, but would still remain linked, economically and politically, to other third states.

Finally, the transfer of funds related to territorial cohesion can negatively influence other European lines of action.

Sources I was inspired by to write this article:

• Il nuovo piano energetico dell’Ue per ridurre la dipendenza dalle fonti fossili russe, published by Linkiesta
• Ue, Von der Leyen: “Ecco RepowerUe, il piano energetico congiunto per essere autonomi da Mosca”, published by RaiNews online
• Piano Ue per l’energia, così sarà finanziata l’indipendenza dalla Russia, published by Il Corriere della Sera

I am an Italian student who tries every day to improve her English. I really like writing and studying in this language, also to be able to reach more people. However, I still often run into mistakes. So, if while reading my article you have found some, do not hesitate to contact me, either through a comment or a private note!