On Thursday, February 24, the day Russia invaded Ukraine, Europe bought 0.5 billion euros worth of oil and gas from the aggressor. There was even more gas going west that day than in the days before the war. A week and a half later, despite all the harsh words and very heavy sanctions, Europe is still importing plenty of Russian gas every day. Every shower seems to fill Putin’s war chest. Municipalities and water boards have therefore already announced that they want to ‘get rid of Putin’, like almost everyone. But is that possible?
If Europe were to stop importing Russian gas today, this would not immediately cause problems. Thanks to one of the mildest winters in living memory, Europe has just enough gas in storage to last several months.
‘The major problem will arise next winter’, says energy analyst Jilles van den Beukel of the The Hague Center for Strategic Studies, because the gas storage is currently almost empty. Ideally, stocks will be filled to 90 percent by early next winter.
What are we going to fill that gap with? There are hardly any alternatives. Suppliers such as Norway are already running at maximum capacity, and North African gas is difficult to get here. What options do the Netherlands and Europe have? And do they really work?
1. Start saving as much as possible immediately
In the very short term, profit can be made mainly by using less gas. This is already happening, mainly due to the higher gas price. Aluminum factory Aldel in Delfzijl has been largely shut down since October because the production of aluminum currently costs more than it yields. Greenhouse horticulturists and fertilizer manufacturers have also reduced production.
Gas consumption in homes and buildings has also declined slightly in the past two months, calculated Martien Visser, lecturer in energy transition at Hanze University of Applied Sciences Groningen. ‘That was about 6 percent, still not very impressive. Still, the more people have to deal with high bills, the more frugal they are likely to become.’
About 20 percent of the gas heats homes. Saving is relatively easy: setting the thermostat one degree lower already saves 6 percent. Many homes are still poorly insulated. If high gas prices do not themselves ensure that gas consumption falls sufficiently, politicians may also be able to enforce it. ‘For example, you could prohibit landlords of houses with a low energy label from raising rents as long as they have not insulated their houses better,’ says Visser.
A public campaign to use less gas is the first step of the Gas protection and recovery plan† This comes into effect if the Netherlands has to ‘switch off’ in the event of a major scarcity. This will be followed by the shutdown of certain industries, although it is not specified which ones.
GroenLinks made a first move in the House of Representatives last week: immediately stop using gas for growing flowers and the production of fertilizer. Added together, this already leads to a saving of 10 percent on national gas consumption, a quick calculation shows.
But don’t think about it too lightly, warns the spokesperson for fertilizer producer Yara. ‘Fertiliser is essential for food production in Europe. Without our products, food will become scarcer and more expensive.’ It will be like that for almost all gas savings: it can be done, but it hurts.
2. Open the Groningen gas tap again
These days ‘the G-word’ is regularly used. Can’t Groningen just open again? Just like the House of Representatives, Minister Jetten does not want to do it for the time being. “Only as a very, very last resort,” he said. Remarkably enough, this seems to be less sensitive in Groningen itself. From a survey that the Daily newspaper of the North carried out, it turned out this weekend that two-thirds of the people of Groningen are prepared to have more gas pumped out under their province, if on the other hand the damage caused by gas extraction is finally being properly compensated.
But anyone who thinks Groningen can help Europe through the coming winters will be disappointed. This year, another 7 billion cubic meters have been pumped from the Dutch gas fields. According to the State Supervision of Mines, this can still be increased slightly, but more than 12 billion cubic meters per year makes the risk of dangerous earthquakes too great. And maximum delivery from Groningen can only replace about 6 percent of Russian deliveries to Europe.
3. Run the coal-fired power plants at full power
Coal-fired power stations in Europe will also be fully operational again (just like last winter, by the way). It is not yet clear how this will work in the Netherlands. The cabinet recently announced the closure of the Onyx power station. The remaining three plants are allowed to operate at a maximum of 35 percent of their capacity.
‘As a politician, I would have the coal-fired power stations running at full capacity as soon as possible,’ says professor of energy transition Visser. “All the gas you save now can be used to fill up your winter supplies.” The Hague is silent for the time being.
Keeping the German and Belgian nuclear power stations open for longer is also on the table. Germany wants to close its last three plants this year, but may postpone this decision.
4. Build many more windmills and simplify procedures
The rapid rise of renewable energy sources offers hope. They are clean, cheap and can help make Europe less dependent on Russia. ‘Free energy’ some now call these sources. Europe had already set out to become a frontrunner in climate-neutral energy generation. By 2030, 40% of the energy in the European Union should be green.
How these already very ambitious plans can be accelerated so that they can replace a significant part of Russia’s gas as early as next winter is still a mystery. The European Commission will present a proposal next week. Here and there there is a strong call to speed up procedures, so that sun, wind and the necessary cables and pipelines can be laid faster. Now complex procedures lead to a lot of delay. In addition, many people have to be trained quickly who can build the necessary infrastructure.
5. Stock LNG on a large scale
The eyes in the energy world are mainly focused on LNG, liquefied natural gas. This is natural gas that is liquefied in large factories. As a result, it can be transported by sea by ship. LNG is produced on a large scale in countries such as Qatar and the United States (and in Russia).
There are about thirty LNG terminals along the European coast where the liquid gas supplied can be converted back into gas for the pipelines. Together, these terminals can meet about half of the annual European gas demand, on top of the quarter that comes from Norway as standard.
This capacity will be expanded rapidly in the coming years. Germany, which currently does not have a single terminal, wants to build two in the near future. The Dutch LNG terminal, in Rotterdam, can meet about one third of our annual gas needs. Gasunie announced last week that it wanted to use more LNG at an accelerated pace.
The big question is how Europe can bring in enough LNG. Worldwide production is one and a half times the European requirement, but that gas has usually already been sold to other customers under long-term contracts.
Thanks to the mild winter, things are going well now. Many Asian countries have used less LNG than they ordered. That gas is now fully bunkered in Rotterdam and other European terminals.
Asian parties may also be willing to resell their LNG contracts to Europe in the long term. Asian countries will then benefit from the very high gas price. They compensate for the damage by turning their coal-fired power stations back on. A possible rescue for Europe, but bad news for the climate. And for the inhabitants of Asian cities, who are again faced with serious air pollution.
Liquefied gas promises to become the most important pillar of gas supply in the longer term, but Europe must act now. European energy companies must conclude long-term contracts with LNG producers. That sounds logical and simple, but in practice it is not. In the current liberalized energy market, it represents a major risk for energy companies to conclude such contracts. That is why they often buy in the (very) short term. Europe will have to intervene in the market to also make longer-term contracts possible.
All in all, it remains very uncertain at least until 2025 how much LNG can actually be obtained for Europe. The market will only be a bit more spacious if a number of LNG factories open in three years’ time.
More coal, less natural gas for electricity production in 2021
The Netherlands is producing more and more electricity from sustainable sources and our dependence on fossil fuels is decreasing. But the share of coal actually grew last year, according to figures from the Central Bureau of Statistics for 2021.
Electricity production from coal rose by 72 percent last year, while that from gas fell by 22 percent. This development is unfavorable for the climate (the CO2 emissions of coal are twice as high per kilowatt hour generated) is a direct result of the high gas prices, which means that energy producers are more likely to resort to coal. Incidentally, more than three times more electricity was still produced with natural gas than with coal.
One-third of Dutch electricity was sustainable last year, a record. Compared to other European countries, the Netherlands is in the middle bracket, according to Statistics Netherlands. The Netherlands also became a net importer of electricity last year, because total production decreased. In 2020, even more electricity was exported than entered the country.