The EU energy system’s transition away from fossil gas was set in motion by the European Green Deal’s climate targets. The energy crisis of the last two years has firmly shifted the outlook on fossil gas: a clear downwards trajectory in the medium to long term. However, the current EU policy framework is insufficient to ensure a smooth and managed transition. Effective planning of the whole energy system is therefore critical and must be built on solid projections of future demand.
Fossil gas use has reduced significantly in Europe in recent years, and this trend is being accelerated – due to the recent energy crisis and the explosion of clean technologies. Fossil gas currently still plays a key role in meeting the energy needs of the power sector, households and industry but the imperatives of energy security, economic competitiveness and climate ambition have set the EU on the path away from fossil gas. Alternatives already exist, principally using efficient, smart electric solutions.
The EU and its member states must consider how to deploy and build demand for these solutions in a predictable way, and ensure the right mechanisms are in place to efficiently plan energy system infrastructure needs. This requires a holistic understanding of the changes underway in our energy systems. This includes the planning and governance of the energy system which must evolve to be more comprehensive and transparent as energy systems become increasingly integrated; rethinking the energy security paradigm as decarbonisation and electrification advance; avoiding costly lock-ins to fossil gas infrastructure for households; enabling industry to bridge short-term commercial drivers and achieve the long-term benefits of decarbonisation; and ensuring workers and regions across the EU can benefit from a competitive clean economy.
EU gas transition: What’s next? A comprehensive framework for a managed gas transition
The critical next step lies in effectively managing this transition. Failure to do so could result in higher bills for businesses, industry and consumers, reduced investor certainty and wasted public funds. A comprehensive framework to address these challenges and ensure a successful fossil gas transition should implement several key recommendations:
- Review energy system planning processes and governance to deliver a forward-looking approach based on transparent, integrated planning in line with an electrified and decarbonised future.
- Adopt clear and well-defined projections of future EU fossil gas demand reduction to provide clarity for planning and policy making.
- Build a new approach to delivering energy security which does not depend on fossil gas power generation and can manage energy systems with high renewable shares using flexibility and back-up services.
- Safeguard households from the rising costs of volatile fossil gas by developing a citizen-focused strategy that enables a fast and fair shift away from fossil gas.
- Develop a strategy that enables industry to bridge the gap between the short- and long-term economics of the clean energy transition, prioritising direct electrification, enabling access to affordable renewable electricity, and supporting upfront investments.
- Create a strategy to transition gas industry workers impacted by declining gas demand and plan across employment sectors to meet future needs.
- Address the EU’s regional differences in exposure to gas demand and fiscal space to leverage regional advantages and socio-economic development to build a competitive and cohesive European clean economy.
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