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Green alternatives can replace Russian gas by 2028
Europe could replace its Russian fossil gas supplies with green alternatives by 2028, but it will require significant investment, policy improvements and upskilling, according to a report by the Oxford Sustainable Finance Group.
The study titled “The Race to Replace: the economics of using renewables to free Europe from Russian gas” weighs up the costs and benefits of completely replacing pre-war levels of Russian gas imports with green alternatives in the next five years. This would help Europe achieve its climate goals, improve energy security and support EU industry. However, this transformation will be out of reach if Europe fails to put the necessary drivers in place.
To switch to green alternatives, European policymakers need to focus on four key areas. First, public and private funding is required to facilitate the massive rollout of renewables and heat pumps. The total investment requires capital expenditure of €811 billion, but up to 90% of the costs can be recovered from fuel savings that could be made by avoiding expensive gas purchases.
Second, policymakers need to ensure that Europe has the skilled workers it needs to install and maintain green technology. The European Union has a significant skills gap and has already started work to address it with several skills partnerships created with the industry to train workers.
Third, Europe needs to address the security of its supply chains. There are growing concerns that the EU is over-reliant on countries like China for renewable technology materials, such as lithium and rare earths, leaving the bloc vulnerable to supply disruptions.
And finally, Europe’s permitting procedures need to be accelerated, and its electricity networks must be improved to accommodate the required surge in green energy. Many renewable projects are stuck in permitting processes, while others are curtailed due to a lack of grid capacity.
Reference
Report by Oxford Sustainable Finance Group. The Race to Replace: the economics of using renewables to free Europe from Russian gas. Published May 2023. Retrieved from https://sustainablefinance.ox.ac.uk/racetoreplace/
EURACTIV. Study: Stronger policy drive needed for green alternatives to replace Russian gas by 2028. https://www.euractiv.com/section/energy/news/study-stronger-policy-drive...