Clear messages that even if the conflict in the Persian Gulf ends tomorrow, it will take several years for the natural gas market to normalize , Energy Commissioner Dan Jørgensen said yesterday, speaking about a crisis that is costing Europeans 600 million euros a daydue to rising prices.
And while, as the Commissioner told reporters on the sidelines of the annual Eurelectric conference in Helsinki, there may be no immediate threat—at least in the short term —to the bloc’s energy security or to a further rise in prices, however, the concern prevailing within the Commission is evident.
This is both because there is a shortage of aviation fuel, as the Commissioner acknowledged, with some companies having proceeded with flight cancellations or schedule adjustments, and because , as he said, the outcome will depend entirely on the duration of the crisis, which remains unpredictable.
“Even if the situation were to de-escalate tomorrow, it would take a few months for the oil market to return to normal, while it would take a few years for the gas market to stabilize,” he noted.
During the discussion, he did not rule out the extreme possibility that the geopolitical crisis might not have normalized by the end of the summer. This is why the Commission, as he said, is closely monitoring the situation and has established a monitoring center to oversee the state of the European market, specifically for aviation fuels.
Comparing the situation to that of 2022, he said that the EU is clearly in a better position today, as dependence on Russian gas has decreased significantly, but he was quick to add that the current situation is considered even more complex, as it is a dual crisis: it is affecting both oil and natural gas globally at the same time.
“Just how vulnerable we are due to our dependence on fossil fuels is evident from the rise in energy prices, which, due to the conflict in the Middle East, has added an additional energy cost of 600 million euros to the EU on a daily basis,” said D. Jørgensen, speaking about the need to accelerate the green transition and promote electrification.
The numbers are on the rise; last year, 89 GW of new renewable energy projects were installed in the EU, compared to 78 GW the previous year, however, although this is not insignificant—as the Commissioner noted, 1 GW can power approximately one million households— these figures must increase, and quickly.
Critical to this effort are the Commission’s measures regarding the “Grids Package, ” aimed at modernizing and integrating European electricity systems.
“The European electricity system is like a jigsaw puzzle, where while we are designing each piece—that is, each new local electricity interconnection— we do not have the big picture in mind,” he noted, speaking about the need to expedite licensing procedures for both grid projects and renewable energy projects.
Critical interconnections take between five and ten years to complete, Mr. Jørgensen admitted—the Grids Package sets binding deadlines for permits of six months for the simplest projects and two years for the most complex ones - He also spoke aboutdelays in interconnectivity between member states, which directly affect electricity prices.
It should be noted that the Commission is soon to present the European Electrification Plan, which will cover three key sectors: transport, buildings, and industry. “It will address transportation, aiming for faster adoption of electric vehicles, while in the building sector, one initiative will focus on heating, promoting heat pumps. In industry, the focus will be on the transition to technologies powered by electricity, rather than fossil fuels,” said the Commissioner , explaining that the plan will also have a financial dimension.
It will also include specialized policy tools for each of the three sectors, aimed at removing the barriers that are delaying investments, despite the fact that—as he noted—most of these investments have a very short payback period.