Change in the energy usage in EU countries: features of the implementation of the REPowerEU

Kozlov Albert Valerievitch Postgraduate student; Department of Integration and European Law; Kutafin Moscow Law Law Institute Leading Lawyer; Skif Consulting LLC 129345, Russia, Moscow, Losinoostrovsky district, Taininskaya str., 8, sq. 85 albertkozlov27@gmail.com Other publications by this author

In the modern world, the energy sector is of paramount importance for the economic development of States and the well-being of their populations.

Energy policy, one of the most important policies of the European Union, aims to ensure the energy security of its member States by diversifying energy sources and reducing dependence on energy imports. At the same time, article 2 of the Treaty on the Functioning of the European Union assigns energy and trans-European networks to the joint competence of the Union and the participating countries.

Issues related to the energy policy of the European Union have been the subject of research by such Russian scientists as S.V. Zhukov, I.V. Gudkov, E. M. Fazelyanov, I. A. Chuvychkina, I.G. Pashkovskaya, S. A. Roginko, O.I. Kovtun and others. The purpose of this study is to analyze changes in energy consumption in the countries of the European Union and the measures taken in this regard, which will result in recommendations and conclusions on more effective implementation of the current energy policy.

The fuel and energy sector has always been the most vulnerable element of the economy of Western European countries. That is why the European Coal and Steel Community (ECSC) became the basis of European integration in the first place and the European Atomic Energy Community (Euratom).

The 1973 oil crisis, caused by a shortage of energy resources, has once again raised the issue of the need for close cooperation between the member countries of the community in the energy sector. Nevertheless, the member states began to implement large-scale practical steps towards integration in the energy sector only after the creation of a single internal market ^{[1, p.134]}.

Recently, the provisions of articles 170-172 of the XVI section "Trans-European Networks" of the Treaty on the Functioning of the European Union have become particularly important in the context of energy policy. Despite the unclear wording, these articles provide for EU support for trans-European energy infrastructure development projects.

Article 194 of Section XXI "Energy" establishes the general provisions on the interaction of national and supranational levels in the energy sector, separately highlights the presence of a "spirit of solidarity" of interaction. The text of the article makes it clear that the EU's energy policy is inextricably linked to the EU's environmental policy. Thus, the EU's energy policy should be implemented "taking into account the need to preserve and improve the environment."

The modern structure of the energy supply market determines the key areas of legal regulation in this area. In EU countries, priority is given to ensuring the supply of electricity, gas and oil, which leads to the marginalization of other infrastructure elements, including the coal market.

The key areas of legal support for the energy sector are: ensuring stable electricity supplies in the territory of the European Union, stimulating energy efficiency and rational use of resources, as well as promoting the introduction of innovative and renewable energy sources.

The modern EU energy supply system faces two key challenges, necessitating the creation of systems to ensure reliability and improve energy efficiency.

The European Union, being the largest consumer of energy resources, imports 70% of its demand from countries outside the bloc. This creates economic and political dependence on external suppliers.

The usual patterns of energy consumption in the European Union have a negative impact on the environment. It is necessary to develop and implement alternative, environmentally friendly energy sources to ensure sustainable development.

In 2019, the EU launched the Green Deal project, aimed at a profound transformation of Europe's socio-economic system, starting with the energy sector. The aim of the project is to achieve carbon neutrality of the European economy by 2050. To achieve this goal, it is planned to tighten greenhouse gas emission standards, accelerate their reduction, and increase the share of renewable energy sources to 40% by 2030. It also provides for the introduction of taxation on energy resources in order to achieve zero emissions by 2050. For example, in 2023, a "carbon tax" was introduced for suppliers exporting goods to the EU. Some authors characterize the "green" policy as a policy of uncertainty, "generating a wave of changes with unclear results" and leading to internal and external challenges to energy security ^[2].

In addition to the Green Deal, the European Parliament has adopted the European Climate Law, which sets a more ambitious goal of reducing net greenhouse gas emissions by at least 55% by 2030 (up from the current 40%) and makes it legally binding.^[3]

There is an opinion among scientists about the reasons for the increased attention to the EU's energy policy. Thus, A.V. Drynochkin notes that increased attention to the energy sector is due to the desire to strengthen and expand the power of supranational (European) bodies, when management levers are disguised "under common goals" ^[4].

In our opinion, there is an objective need to increase attention to energy and environmental security for the EU countries and for the world as a whole, especially given the geopolitical situation and global temperature rise associated with the use of polluting energy resources. At the same time, this need does not exclude the desire of European officials to expand and strengthen their power over national actors.

The reduction of the EU's dependence on energy supplies from non-EU member states, including Russia, is related to the geopolitical situation. Recently, the EU energy sector has been undergoing significant changes due to geopolitical changes. After 2022, the EU is committed to reducing dependence on Russian energy sources and developing alternative energy sources. According to the European Commission, in the first half of 2024, there was a significant reduction in the share of Russian gas in total EU imports. If in 2021 the share of Russian gas, both piped and liquefied (LNG), was 45%, then by mid-2024 this figure had decreased to 18%. In the 2010s, Russia was the second largest supplier of liquefied natural gas to the EU ^[5]. At the moment, Norway, which supplies pipelines, and the United States, which supplies liquefied natural gas, have become the main gas suppliers to the EU.

The European Electricity Review 2024 (CC BY-SA 4.0) report prepared by EMBER ^[6] presents statistical data on electricity production and consumption in the EU for 2023. According to the report, 2023 was marked by an unprecedented decrease in coal and gas consumption, as well as CO2 emissions. The share of fossil fuels in electricity production in the EU has fallen to a record low of 19%, which is 209 TWh less than in the previous year. At the same time, the share of renewable energy sources has reached a record 44%, which indicates the region's progress in the energy transition.

Wind and solar energy together generated a record 27% of the EU's electricity in 2023, increasing their contribution by 90 TWh compared to the previous year. This indicates the continued growth in the share of renewable energy sources.

Figure 1 – Share of electricity production in the EU by source (%)^[1]

According to the data provided, electricity production from wind turbines exceeded gas production for the first time. An unprecedented annual increase in wind energy generation of 55 TWh (13%) was recorded. The total volume of wind energy production reached 475 TWh, which is 18% of the total, while gas production amounted to 452 TWh. There has been a downward trend in gas production over the past four years.

At the moment, the EU is considering the possibility of phasing out the use of coal. Initially, most of the Union's countries planned to complete this process by 2038. However, due to the current geopolitical situation, it is being discussed to adjust the timing and increase the allowable volume of electricity generation at coal-fired thermal power plants from 168 to 273,273 TWh per year. Some countries, such as Germany, Austria, France and the Netherlands, have already announced plans to restart previously shut down coal-fired power plants. As a result, the demand for coal may even increase in the next 3-4 years, as noted by Russian scientists ^[7].

However, this will not affect the EU's long-term strategy aimed at completely ending the use of coal in the energy sector. After a short-term increase in consumption, its gradual decrease is expected ^[8]. As V.O. Grishina rightly points out, this leads to the problem of the lack of consensus on which energy sources can be considered environmentally friendly and which ones should be abandoned ^[9].

The changes also concern the development of nuclear energy. Countries such as France have already relied on the development of nuclear energy, which can reduce the long-term risks of energy dependence. The French president has announced a plan to build six new-generation nuclear reactors in the country starting in 2028.

Nuclear energy is firmly established in Europe, with nuclear power plants operating in 13 of the 27 EU member states. They provide about a quarter of all electricity in Europe.

Despite the obvious advantages, the development of nuclear energy is facing challenges:

- economic – significant financial costs for the construction and operation of nuclear power plants scare off potential investors;

- lack of working prototypes – European regulators have many start-ups, but there is not even a working prototype of a small modular reactor that could be tested. For example, S.V. Zhukov and O.B. Reznikova identify structural problems of nuclear power generation caused by progressive obsolescence and equipment failures as one of the causes of the energy crisis in the European Union ^[10].

In the near future, the construction of a nuclear power plant in cooperation with Rosatom is planned in Hungary. Hungary is currently negotiating with the Russian state corporation Rosatom on the adjustment of the contract for the implementation of the Paks-2 nuclear power plant project, including regarding financial conditions. The timing of the commissioning of new power units is expected to remain at the initial level – the beginning of the 2030s.

All nuclear power plant construction projects abroad are being carried out as planned, with the exception of the Hanhikivi-1 NPP project in Finland, which was unilaterally terminated by the Finnish customer for political reasons.

Most likely, the inclusion of nuclear energy in the "green register" will provoke further discussion about the future development of this industry in the region. Over time, it will be enriched by the experience of countries operating nuclear power plants, as well as States seeking a full transition to renewable energy sources. This will allow for a comparative analysis of the effectiveness of different models and will serve as a basis for reviewing and correcting decisions.

In the EU, it is expected to increase economic growth while reducing energy consumption through more efficient technologies and energy conservation measures.

The European Parliament has adopted targets to reduce energy consumption in the EU by at least 11.7% by 2030 compared with forecasts for 2020. EU countries should reduce their final energy consumption by an average of 1.5% per year ^[11].

Measures that are envisaged to achieve these goals:

1. Reducing energy consumption in buildings. Buildings in the EU account for 40% of energy consumption and 36% of greenhouse gas emissions. Residential buildings are to be upgraded to Level D by 2033, while the deadline for non—residential and public buildings is 2030.

2. The use of solar technology. EU countries are obliged to ensure the use of solar technologies in new buildings by 2028, when it is technically and economically possible. For residential buildings, the period is until 2032.

3. Renovation of public buildings. EU countries must ensure that at least 3% of public buildings are upgraded annually to buildings with near zero energy consumption or zero emissions.

To achieve this goal, comprehensive measures are being developed and implemented at the regional and national levels, covering various sectors of the economy: public administration, construction, industry, data centers, and others.

The REPowerEU program, adopted in response to Russia's invasion of Ukraine, is the EU's strategy to end dependence on fossil fuel imports from Russia. The objectives of the plan are to diversify energy supplies, increase energy efficiency and accelerate the introduction of renewable energy sources. To support the necessary investments and in accordance with the interagency agreement signed in December 2022, member States can request additional funding by submitting REPowerEU sections to the European Commission to finance specific measures. EU funds are available to support businesses, households, and critical infrastructure needed for a safe transition to energy ^[12].

The features of the implementation of the REPowerEU program are:

1. Diversification of gas supplies. The increased role of liquefied natural gas (LNG) and other pipeline supplies from non-Russian suppliers is envisaged. It is planned to increase the production and diversification of renewable hydrogen and biogas. By 2030, the goal is to double the production of biomethane to 35 billion cubic meters. For example, in order to diversify supplies, the EU Energy Platform was established in 2022, facilitating the signing of memoranda of understanding and cooperation with energy exporting countries such as the United States, Azerbaijan, Egypt, and Norway, mainly in the field of gas supplies.

2. Accelerating the transition to renewable energy sources and improving energy efficiency. It is planned to increase the share of renewable energy sources in the European energy mix from 40% to 45% by 2030. In order to reduce dependence on fossil fuels, it is planned to accelerate the introduction of electric heat pumps. It is estimated that 10 million such devices will be installed over the next five years, which will allow them to gradually displace traditional fossil fuel boilers from the market.

3. Changing the behavior of citizens in terms of energy consumption. It is planned to carry out educational work to save energy and increase the involvement of citizens in this process.

To achieve the goals set by 2030, investments of 300 billion euros are needed, with 210 billion euros to be allocated to projects by 2027.

The main goal of REPowerEU is to reduce Europe's dependence on Russian oil and gas.

The rejection of affordable Russian gas supplies in favor of expensive and so far unstable renewable energy sources that require backup coal and gas power plants has not received support from European society. Right-wing political forces advocating an adequate green policy are gaining more and more popularity in the EU countries. They advocate partial conservation of traditional fuels and cooperation with Russia in the energy sector.

Environmental protection initiatives are currently facing significant challenges. More than a third of the Sustainable Development Goals defined by the 2015 Paris Agreement show less successful dynamics compared to a decade ago. There is a lack of funding and attention to climate change adaptation. Despite this, experts emphasize that abandoning the achieved results is not an acceptable solution. The transition to a "green" economy should be carried out in such a way as to minimize the negative impact on the economic sphere. For example, some scientists talk about the need to transform European trade models ^[13]. The example of China, which simultaneously finances renewable energy sources and continues to use traditional resources, reveals the effectiveness of a balanced approach to the green transition. However, significant financial costs are required to implement this approach.

In the EU, there is an increase in the share of renewable energy sources in the overall structure of electricity production. However, this growth is due not only to factors related to the development of "green" energy in itself, but also to external circumstances. These include, firstly, the decline in industrial production, which is the largest consumer of electricity, and, secondly, the forced abandonment of Russian energy resources as a result of sanctions.

In 2023, Germany was able to provide up to 40% of its energy consumption from renewable energy sources – wind and solar. Despite this, the country has introduced a regime of austerity of electricity, as well as limited production capacity in energy-intensive sectors of the economy.

European Commission President Ursula von der Leyen notes that the refusal to supply Russian energy resources due to the "war of sanctions" has led to a significant increase in electricity prices for European consumers. According to her, this factor has a significant impact on the budget deficit of the EU countries, which is growing rapidly. This situation has a negative impact on both the well-being of citizens and the defense capabilities of EU countries. S.A. Roginko also notes the significant problems of the "green agenda", noting "the unprecedented discrediting of its main organizers, who are unable to meet their obligations" ^[14].

Due to disruptions in the supply of equipment and rising electricity prices, investments in green energy have become less attractive, which has led to losses for companies in this area. The emerging economic crisis in Europe has prompted the European Commission to review its obligations under the Green Deal, including lifting restrictions on internal combustion engines and eliminating advantages for renewable energy sources such as nuclear generation.

Foreign scientists note that the implementation of the RePowerEU plan will affect not only relations between Russia and the EU, but will also entail "fluctuations in energy prices at the global level, which will disrupt global economic stability and endanger the national security of countries with a low level of energy security" ^[15].

Despite significant subsidies provided in the West, alternative energy sources have not been able to completely replace coal, gas, and nuclear power due to their high cost and lack of reliability.

European officials have proposed including the resumption of Russian pipeline gas supplies to Europe in the text of a future agreement on the settlement of the conflict in Ukraine. The idea was approved by several officials from Germany, Hungary and some other countries. They believe that gas supplies from Russia will reduce energy prices in the EU and "give both sides a reason to adhere to the ceasefire agreement." However, officials from Eastern European countries did not support these proposals.

Thus, the processes of diversification of the EU energy sector within the framework of the RePowerEU program, initiated in order to reduce dependence on Russian energy resources, will become irreversible. Despite the fact that initially these processes were caused by the desire to switch to renewable and environmentally friendly energy sources, the current geopolitical situation has significantly accelerated their implementation. Even after the settlement of the political conflict and the lifting of sanctions, the European Union will continue to actively develop alternative energy sources.

The EU's Green Deal is a comprehensive development strategy that will affect all European Union policies, and in the context of EU energy policy, it will affect global energy markets, hydrocarbon exporting countries near the EU, and Europe's energy security. Some of these changes may have a negative impact on the economies of the partner countries.

In this regard, the EU should be ready to analyze and take into account the consequences of the introduction of domestic measures for the international community, and to manage the geopolitical aspects of the deal.

The development of business relations with key regional partners, including Russia and Algeria, as well as with leading world powers such as the United States, China and Saudi Arabia, should be recognized as a priority area of the EU's foreign policy.

^[1] Annual electricity data, EMBER