NEW🚨Europe's energy situation is today much more comfortable than many of us could have expected just a few months ago. But we are not out of the woods. We need to start now preparing for next winter. Our new study provides no-regret options to do so 🧵
bruegel.org/policy-brief/e… 1. The EU has so far weathered the energy crisis and will manage winter 2022/23 even if Russia abruptly halts all pipeline gas flows. However, preparations must be made for winter 2023-24. In particular, gas storage facilities should be 90 percent full by 1 October 2023.

EU leaders took some important decisions during the night. A short thread to distill the key elements and reflect on their implications (1/6) For the first time, European countries will jointly procure gas. Mandatory demand pooling for at least 15% of their gas storage filling needs next year, to better navigate the difficult waters of a tight global LNG market. /2

NEW🚨What energy policy actions have EU governments undertaken to tackle the crisis? This new @Bruegel_org dataset provides a first overview of policies to promote gas diversification, fuel switching, energy savings, renewables and efficiency. THREAD 1/10

bruegel.org/dataset/nation… RU invasion of UA has profoundly reoriented energy policy in Europe. Mainly thanks to the dedicated work of my colleagues @GSgaravatti & @CeciliaTrasi, we can now offer a clear picture of what’s really happening in the field. Any comment/suggestion is warmly appreciated! 2/10

The European Commission will unveil on Tuesday a new package of legal proposals to tackle high energy prices. @johnainger and @E_Krukowska had a first look at the draft document. Here below a summary of they points to be expected 👇

bloomberg.com/news/articles/… 🟢Temporary dynamic price limit for TTF transactions.

🟢Temporary intra-day price spike cap mechanism to avoid extreme volatility in energy derivative markets.

🟢New benchmark for LNG to be started by end-2022, to be ready for 2023 gas storage filling season.

Gas price cap🇪🇺President von der Leyen just confirmed in the European Parliament that the EU might temporarily agree on a price cap on gas used in electricity generation. (the "Iberian model"). This would be a mistake for at least 3 reasons.

bruegel.org/policy-brief/a… 1⃣ The Iberian exception has incentivised gas consumption. A broad application of this approach to the EU would likely increase gas prices, to the detriment of industrial consumers that use gas directly rather than via electricity.

Here are the 4 key measures just agreed by EU energy ministers🇪🇺 1. Electricity demand reduction. Voluntary reduction target of 10% of gross electricity consumption and a mandatory reduction target of 5% of the electricity consumption in peak hours.

NEW🚨Tomorrow EU energy ministers will convene to (hopefully) green-light emergency energy measures. In this paper, we review the various options on the table. With @jzettelmeyer, @GeorgZachmann, @c_heussaff. 🧵bruegel.org/policy-brief/a… Why are we here? Since Russia’s invasion of Ukraine, wholesale prices for electricity and gas in the European Union have risen 5 to 15-fold, with severe impacts for households and businesses. The crisis is also creating liquidity problems for energy companies. 2/

NEW🚨EUR 500 billion. This is how much European governments have allocated since Sept 2021 to shield households and businesses from rising energy prices. Here our @Bruegel_org dataset, updated today (thanks to the great work of @GSgaravatti): bruegel.org/dataset/nation… 🧵1/ A caveat is here important. Some of the recent packages – most notably in the UK, Germany, Italy, Denmark have only been announced and have yet to be implemented. We report in the table here below the exact breakdown of this. 2/

EU deal on Russian oil embargo🛢️The deal reached by #EUCO is far from ideal, but it does represent an important step in the right direction. Quick 🧵 1/ The major weakness of the deal is timing. This will really be effective by end-2022, while we would need to cut Russian energy rent ASAP to weaken its economy and its military potential. 2/

This week, Denmark, Germany, Belgium and the Netherlands committed to turn the North Sea into a "green power plant" by building artificial islands where wind energy could be turned into hydrogen and electricity. Few points on this fascinating - and a bit futuristic - project.🧵1/ The plan in a nutshell: to increase the four countries' installed offshore wind capacity from the current level of 15 GW to 65 GW by 2030 (i.e., equivalent to around 40 nuclear reactors) and to 150 GW by 2050 (i.e., equivalent to around 100 nuclear reactors). 2/

EU GAS🚨EU can manage without Russian gas next winter, but must be united in taking difficult and costly decisions. Our new @Bruegel_org analysis, with @GeorgZachmann, @McwilliamsBen & @GSgaravatti

bruegel.org/2022/02/prepar… The immediate challenge will be to refill gas storages as much as possible before next winter. Even record high non-Russian imports would not be enough to sufficiently refill them. So, Europe would need to reduce demand by at minimum 400 TWh (or 10%-15% of annual demand)

The EU launched today its plan to support infrastructure development around the world: the #GlobalGateway. This is more a repackaging of existing initiatives than EU fresh cash, but anyhow represents an important step forward for the EU. Let’s see why [Thread🧵] Baseline: the world needs major infrastructure investments. The World Bank estimates that to achieve key global goals –such as climate protection, access to energy, water and sanitation, greater mobility, etc– the world must invest in infrastructure EUR 1.3 trillion per year

🌍Glasgow: increasingly clear sense of direction, but still no real hard numbers. A quick thread with some key takeaways 🧵 #COP26 COP26 ended on a mixed note. Global climate action is visibly accelerating, and Glasgow did play an important role in channeling the increased sense of urgency into a clearer action plan for the coming years. However, the conference failed to deliver on the hard numbers.

Can the Green Deal really be considered as Europe's new growth strategy? A super short thread, with some numbers 👇 #ClimateChange #GreenDeal #EUGreenDeal #SOTEU 1. According to the macro-models used by the European Commission itself to assess the new 2030 climate target, the answer is: NO. At best, the EC economy would expand by 0.5% due to increased climate ambition.

What is the role of climate action in the #EUCO deal? 🌍💡A thread 👇
#EUGreenDeal #GreenRecovery 1a. An overall climate target of 30% will apply to the total amount of expenditure from the EU budget and NextGenerationEU. As we have argued before, this target should be handled carefully, as anticipated contributions to climate-related spending are likely to be overstated.

So, here is the leaked draft of the European Green Deal plan that Ursula von der Leyen will present this afternoon. A thread.

(You can read it here >> politico.eu/wp-content/upl…) 1) As expected, this is a comprehensive shopping list, encompassing all elements already presented by the President in the Political Guidelines - without adding much detail. The tone of the document is prudent.