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EU action to address the energy crisis

Russia’s unjustified military aggression against Ukraine and its weaponisation of gas supplies have provoked an unprecedented energy crisis for the EU. They have caused a sharp rise in energy prices and brought hardship for Europeans. The EU is taking strong action to address this.

What the EU has done to address the energy crisis

The Commission has been tackling the issue of rising energy prices for the past year. Since Russia’s invasion of Ukraine and its further weaponisation of energy resources, the situation on the energy market has worsened considerably.

Despite the significant drop in Russian energy supplies – from 45% of our gas imports last year, to just 14% in September 2022 – Europe has managed to find alternative supplies and reduced its demand to compensate for the shortfall.

We have also taken measures to mitigate market volatility, and to help citizens and businesses by redirecting excessive energy sector revenues to them.

Thanks to the Energy Prices Toolbox , Member States have deployed many measures at national level to ease price pressure on citizens and industry. In May, we adopted the REPowerEU Plan to end our dependence on Russian fossil fuels as soon as possible.

To ensure security of supply for the coming winters, we have put in place new minimum gas storage obligations and a target of 15% gas demand reduction to ease the balance between supply and demand in Europe. Efforts to save energy and fill storage have so far delivered good results.

In September 2022, new measures were adopted to reduce electricity demand and use energy surpluses for the benefit of citizens and industry. 

On 18 October 2022, the Commission proposed new measures on joint gas purchasing, price limiting mechanisms, and transparent infrastructure use, as well as on solidarity between Member States and demand management. This will provide further stability to the market.

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Key figures

5%
obligation to reduce electricity demand during peak price hours
15%
gas demand reduction target
92%
gas storage level in the EU

Diversifying our supply

The EU has been working with international partners to diversify supplies for several months, and has secured record levels of import of liquefied natural gas (LNG) and higher deliveries of pipeline gas. 

Achievements

  • Trilateral Memorandum of Understanding signed between the EU, Egypt and Israel for the export of natural gas to Europe
  • Memorandum of Understanding with Azerbaijan on a Strategic partnership in the field of energy
  • The US commitment to provide the EU with additional, at least, 15 billion cubic metres of LNG this year
  • In the first half of 2022, non-Russian LNG imports rose by 19 billion cubic metres (bcm) as compared to the same period last year. Non-Russian pipeline imports also grew by 14 bcm from Norway, Azerbaijan, the United Kingdom and North Africa

Reducing demand

Moreover, the Plan includes the possibility to declare a state of EU alert triggering compulsory gas consumption reductions across the Member States. This is a strong signal that the EU will do whatever it takes to ensure its security of supply and protect its consumers.

Achievements

  • Reduced our gas consumption by around 15%
  • Russian gas supplies have decreased from 40% to down to 9% of pipeline gas

The Commission is closely monitoring demand reduction measures. Preliminary analysis on the basis of reporting by 15 Member States shows that in August and September 2022 EU gas consumption would be around 15% lower than the average of the previous 5 years. Similar efforts will be needed every month until March 2023. Member States will report every two months on their progress. The Commission stands ready to trigger the EU Alert or review such targets if current measures prove insufficient.

New gas storage rules

Gas storage has an important role to play in guaranteeing the EU's security of supply, covering, in a normal winter, 25-30% of gas consumed across the EU.

As of June 2022, there is new legislation that requires EU underground gas storage to be filled to 80% of capacity by 1 November 2022 – and to 90% in the years after - to ensure supply for the coming winter.

See latest figures.

Achievements

  • Gas storage in the EU is now at more than 90%. It was 30% in February 2022, and since then we have been working with EU countries to increase Europe’s energy reserves

Buying energy together

Reducing bills for European households and businesses

The first response to tackle high prices is to reduce demand. This can impact electricity prices and achieve an overall calming effect on the market. Based on the Commission proposals, the Member States agreed on;

  • a target to reduce overall electricity demand by 10%
  • an obligation to reduce demand during peak price hours by 5%

By reducing electricity demand by 5% at peak times, we reduce gas use for power by around 4% over the winter and reduce pressure on prices.

Cap on revenue for low-cost power generation

‘Inframarginal’ electricity producers have been making exceptional profits as high gas prices have driven up the wholesale electricity price, while their generation costs have remained low. The Commission has therefore proposed a temporary EU revenue cap of €180 per MWh of electricity produced from those technologies: nuclear, lignite and renewable sources, among others.
Any revenue above this level will be collected by the Member States and redirected to energy consumers to alleviate the impact of high energy prices.

Solidarity contribution from fossil fuel companies

Oil, gas, coal and refinery companies have also made massive profits in recent months, mostly due to energy market disruptions spurred by Russia’s invasion of Ukraine, rather than business decisions or investments. These companies are not impacted by the aforementioned measures. In the interests of solidarity and fairness, all energy sources must help to mitigate the impact high prices have had on consumer bills. To achieve that, the Commission has proposed a temporary solidarity contribution on surplus profits generated from activities in the fossil fuel sectors in 2022.

Strengthening EU solidarity

Solidarity is the cornerstone of the Union, and it underpins the efficiency of its action. Five years after agreeing on the Security of Supply Regulation, only 6 bilateral solidarity agreements between Member States have been signed, out of the 40 possible ones. This is too slow, and the Commission has proposed setting default rules on solidarity, which will ensure that a Member State facing an emergency will receive gas from the others in exchange for fair compensation.

The obligation to provide solidarity will be extended to non-connected Member States with LNG facilities provided that the gas can be transported to the Member State where it is needed.

Investing in infrastructure

Achievements

Supporting households and businesses: Recent examples

  • The Commission has approved, under EU State aid rules, a Polish scheme to partially compensate energy-intensive companies for higher electricity prices resulting from indirect emission costs.
  • The Commission has approved a €220 million Spanish measure to support Cobra Instalaciones y Servicios, S.A. in the production of renewable hydrogen. The measure contributes to the achievement of the EU Hydrogen Strategy and the European Green Deal targets, while helping reduce dependence on Russian fossil fuels and fast forward the green transition in line with the REPowerEU Plan.
  • The Commission has approved, under EU State aid rules, a €150 million Finnish capacity mechanism to safeguard security of electricity supply in Finland. The measure will also help reducing CO2 emissions in the electricity sector, in line with the EU Green Deal, and contribute to the objectives of the REPowerEU Plan to reduce dependence on Russian fossil fuels.

Energy saving actions: how you can contribute

Energy saving actions - timeline

  1. 22 November 2022

    Commission proposes a new instrument to limit excessive gas price spikes

  2. 30 September 2022

    Energy Ministers agreement on the Regulation on an emergency intervention to address high energy prices

  3. 14 September 2022

    Proposal for a new emergency regulation to address high gas prices in the EU and ensure security of supply this winter

  4. 26 July 2022

    Energy Ministers agreement on the Regulation on coordinated demand reduction measures for gas

  5. 20 July 2022

    Commission proposal for a Regulation on coordinated demands reduction measures for gas and Communication "Save gas for a safe winter"

  6. 27 June 2022

    Adoption of Gas Storage Regulation

  7. 18 May 2022

    The Commission presents the REPowerEU Plan

  8. 23 March 2022

    Commission proposal to amend the Security of Gas Supply Regulation and a Communication "Security of supply and affordable energy price"

  9. 8 March 2022

    Communication “REPowerEU": Joint EU action for more affordable, secure and sustainable energy”

  10. 13 October 2021

    Communication “Tackling rising energy prices: a toolbox for action and support”

Documents

18 OCTOBER 2022
Factsheet on EU’s response to the high energy prices and security of supply
English
(HTML)
Download

18 OCTOBER 2022
Factsheet - Energy Emergency: preparing, purchasing and protecting the EU together
English
(5.95 KB - HTML)
Download

14 SEPTEMBER 2022
Emergency Intervention
English
(5.95 KB - HTML)
Download

18 MAY 2022
Factsheet on the International Energy Strategy
English
(5.95 KB - HTML)
Download

18 MAY 2022
Factsheet on Energy Savings
English
(5.95 KB - HTML)
Download

18 MAY 2022
Factsheet on Clean Energy
English
(5.95 KB - HTML)
Download

13 OCTOBER 2021
Tackling rising energy prices: A toolbox for action and support
English
(5.95 KB - HTML)
Download

18 OCTOBER 2022
EU Energy Market and Energy Prices
English
(5.95 KB - HTML)
Download