EU energy security: Implications for the UK

EU dependency on Russian energy

The EU is highly dependent on Russia for its energy, notably gas. It imports over 80% of its gas, with Russia providing around 40% of those imports.

How EU dependency on Russian energy affects the UK

The UK is far less reliant on Russian gas than the EU, but security of EU gas supply matters to the UK because:

• it affects the prices of UK gas and electricity;
• it could affect the UK’s own security of supply if gas imports into the UK were re-directed to the EU;
• energy exports are economically important to Russia and changes may therefore affect geopolitical relations.

The EU’s plans to reduce dependency on Russian gas

The EU’s approach since the Russian invasion of Ukraine has distinguished between short and longer-term measures. To support consumers, companies and sectors severely affected by the high cost of energy, the European Commission’s REPowerEU plan, published on 8 March 2022, identified the following possible financing mechanisms:

• price regulation to help protect consumers;
• state aid to provide short-term relief to companies affected by high energy prices;
• temporary tax measures on energy companies’ large profits (a windfall tax);
• receipts from the sale of emission allowances (giving a ‘right to emit’) under the EU Emissions Trading System.

To improve gas security during winter 2022-23 and beyond, the European Commission has proposed that existing gas storage facilities in the EU are filled up to at least 80% of their capacity by 1 November 2022 and 90% of their capacity by 1 November of subsequent years, subject to review. Member States are able to provide aid to companies as an incentive to refill. The 90% target reflects average historic EU storage filling levels (with an average of 87% in the last few years).

For the longer term, and in addition to gas storage obligations, the Commission’s REPowerEU plan advocated a two-pronged approach involving:

• Diversifying gas supplies, via higher liquefied natural gas and pipeline imports from non-Russian suppliers, and larger volumes of biomethane and renewable hydrogen production and imports;
• Reducing the use of fossil fuels by boosting energy efficiency, increasing renewables and electrification, and addressing infrastructure bottlenecks.

UK-EU cooperation

Russia’s invasion of Ukraine has stimulated UK and EU cooperation on the security of energy supply.

At the 30 March 2022 meeting of the UK-EU Specialised Committee on Energy, the UK and EU agreed to facilitate regular exchanges on the security of supply (PDF). They specifically discussed establishing a Working Group on Security of Supply as a matter of priority.

Subsequently, the UK Government confirmed in its Energy Security Strategy that Liquefied Natural Gas (LNG) destined for mainland Europe could be channelled through the UK. This is because there is insufficient LNG import capacity within the EU, but spare capacity in the UK as well as capacity on the pipelines from the UK to mainland Europe.