The choice to replace Russian gas: a bad decision?

Published on Saturday 13 May 2023 | Article n°445

The Oxford Sustainable Finance Group, part of Oxford University, has carried out a study on the replacement of Russian gas in the European Union.

The main conclusion is that this fuel, which provided half of the EU's natural gas needs in 2021, could be replaced by "green" energy,

by 2028. This will be cheaper than replacing Russian gas with fossil fuels from other countries.

This solution avoids paying for gas in the future. The investment required over the period 2023-2028 is 512 billion euros (70% more than if the plan were not implemented). Half of this amount will be recouped over 30 years through lost gas imports alone.

Photon of 10 May 2023

Editor's note There are three aspects to consider: European energy independence which is a good thing in itself, but its cost must be considered. There is the replacement of Russian gas by gas from another country. There is the choice of transferring gas to electricity

The study is a little hasty in dismissing the alternative of Russian gas being replaced by gas from other countries. Indeed, according to often repeated reports, Russian gas was cheaper than gas from other countries. Moreover, liquefied gas is considerably more expensive than natural gas due to the liquefaction and subsequent return to natural gas processes. The Commission has tried to keep this under wraps, as it has chosen, under pressure from lobbies, to go all electric.

According to the above study, the choice to switch to green electricity costs 70% more than the cost of natural gas. This is huge because it will increase the cost of energy for European industry and affect their long-term competitiveness. Only half of this amount will be recouped after thirty years, which puts a figure on the excess cost of this alternative.

Especially since photovoltaic or wind energy is in its infancy and we have not yet mastered (to put it mildly) the daily management and even more so the one between seasons. This shows the wastefulness of the European Commission's management.

In economics, the first to launch a race to implement a new technology are rarely the ultimate winners.

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