INTERVIEW - IEA says EU risks doubling gas imports by 2030
Date: 03-Dec-02
Country: UK
Author: Eva Sohlman
"Unless it changes its energy policy and makes it legally binding to meet targets for increased use of renewable energy we will have a scenario with rapidly growing import-dependency," Fatih Birol told Reuters in an interview.
IEA, the West's energy watchdog, forecasts that EU gas imports will jump to 80 percent by 2030 from 44 percent now while demand is set to rise to 34 percent of the total energy mix from a current 23 percent unless the EU further legislates to boost the use of renewable energy.
"From an energy security supply point of view to rely so much on imports for its gas would be a very risky business," Birol said.
To avoid that, the EU needed to legislate to raise its target for electricity generated from renewable energy sources such as solar, biomass and windpower to 22.1 percent by 2010 from 13.9 percent in 1997, he said.
Under the United Nations Kyoto protocol, the EU aims to cut greenhouse gases by eight percent on 1990 levels by 2008-2012.
The growing gas demand will mainly be driven by rising electricity consumption by households and the service sector, Birol said.
Should the 15 EU member states decide to hedge against such heavy reliance on gas imports and boost green energy, they would have to move swiftly as it takes a long time to make changes in the industry, Birol said.
"If it decides to go for the renewables scenario then it must act quickly and radically. Investments made today will determine the future as power plants can last up to 40 years."
EU GAS PRICES TO RISE
Birol said EU gas prices, which are to a large extent determined by transportation costs, were likely to rise if import dependency from remote countries was allowed to continue.
"Distances will be getting longer. Imports from Russia and the Middle East will push up prices," he said.
The top three suppliers to the EU are Russia, Norway and Algeria, and more gas is set to flow in from Africa and the Middle East as output from North Sea gas fields is expected to start to die out from 2005.
By 2030 and without a new framework for renewables, Russian gas will account for 33 percent of imports while gas from Africa will account for 27 percent and Norway and the Middle East 17 percent each.
Birol said growing imports of LNG - natural gas cooled into liquids for easy transport - were also likely to boost pricies.
Europe's demand for LNG is expected to triple by 2025 which is likely to bring up gas prices due to costly construction of new LNG terminals to process the gas.