How has Europe transformed its energy sector amid the decline of Russian gas supplies? | Experts’ Opinions

This year began with a challenge for all those European countries receiving gas from Russia. The transit of natural gas through Soviet-era pipelines through Ukraine was halted in the early hours of January 1, after Kiev refused to extend the transit agreement. Slovakia, Hungary, and Moldova were the countries most affected being the most dependent on this transit. The closure of Russia’s oldest gas route to Europe ends a decade of strained relations that was triggered by Russia’s annexation of Crimea in 2014 and introduces new challenges as well as opportunities for the EU’s energy sector. How has Europe reshaped its energy sector amid the decline of Russian gas supplies? Check some opinions below.

DevelopmentAid: What are the long-term implications of Ukraine’s decision to halt Russian gas transit for European energy security and economic stability?

“With the level of dependency on Russian gas supplies for energy security and economic stability varying widely across member countries, the implications for the halt of the gas supplies will also vary widely across countries in Europe. For example, transit countries will lose transit deals, and other countries disproportionately dependent on Russian gas supplies are likely to experience rising costs and the logistical or financial constraints of shifting supplies. Moreover, the impact will also depend on the preparedness of individual countries, such as having access to strategic storage reserves or a diversified portfolio of alternative energy sources. In the long-term, the European response to ensure energy security will lead to the diversification of energy sources including both renewable and Liquefied Natural Gas (LNG) imports as well as energy supply routes, more investment in cleaner energy sources and energy infrastructure including the expansion of strategic storage reserves and the strengthening of regional cooperation to maximize the use of regional energy infrastructure and coordination on energy security matters. The shift from Russian gas supplies will also have implications for European economic stability through energy price increases that will present economic challenges for households and industries, increased investment in renewable energy sources with implications for new jobs creation and significant private and public sector financing requirement, improved energy efficiency leading to enhanced economic resilience and reduced household energy bills, and a new geopolitical energy landscape to manage alternative energy supply sources and routes. In the long-term, these changes will lead to a European energy system that is more resilient, sustainable, and secure.”

“If Europe continues with its policies and determination to reduce gas consumption while increasing energy efficiency measures and renewable power generation, halting Russian gas supplies might not have major effects on the continent’s energy security or its economic stability. Gas supplies from the North Sea and the imports of LNG accounted for more than 60% of the European Union’s gas imports in 2024, while flows of Russian gas via Ukraine accounted for 9%, or around 15 billion cubic metres (bcm). Thanks to its aim to reduce consumption and increase renewables and energy efficiency, the EU curbed gas use by 20% between 2021 and 2023. Its 2024 gas use declined by around 2%. REPowerEU, the EU’s proposal to end its dependency on Russian fossil fuels by 2027, was launched in May 2022 with three main aims: to save energy, stimulate renewables growth, and diversify energy supplies. As part of the plan, EU member states agreed to the European Commission’s proposals to voluntarily reduce gas use. These have been articulated in three targets, announced in 2022, 2023 and 2024. Aware of how reducing gas consumption has been fundamental to Europe’s security of energy supply, the Commission announced a third demand reduction target in March 2024.”

“While Moldova faces challenges due to the country’s reliance on Russian gas transit via Ukraine, the EU is well-prepared to manage the shift. Investments in LNG infrastructure and alternative supply routes have ensured minimal disruption, demonstrating Europe’s growing resilience. Economically, it strengthens Europe’s energy independence but requires ongoing collaboration and infrastructure upgrades to ensure stability.”

“The termination of Russian gas exports via Ukraine marks a pivotal shift in Europe’s energy landscape. This transition reduces dependency on Russian energy and enhances energy security by diversifying supply sources. Long-term, this could foster economic stability through investments in renewable energy, LNG infrastructure, and stronger partnerships with alternative suppliers like the U.S. and North Africa. However, challenges include potential energy price volatility and the need for substantial investments in infrastructure and technology to support the transition.”

DevelopmentAid: What are the potential economic benefits and challenges for Europe as it shifts away from Russian energy dependency?

“The transition from Russian gas supplies presents both economic benefits and challenges that need to be carefully managed to ensure energy supply security for Europe. There are several ways in which the current situation could be exploited to benefit EU countries including incentivizing diversification of energy sources thereby enhancing energy security; increasing investment in clean energy sources, including solar, wind, hydro, geothermal, and creating new jobs to improve economic growth. Under pressure to shift to alternative energy sources, Europe will be more incentivized to champion global green technologies through innovative solutions and advanced technologies for alternative energy sources, and benefit from enhanced geopolitical independence. The economic challenges of the transition will emerge from several sources and present certain risks that will need to be mitigated to ensure energy security for Europe. These challenges include increased energy prices resulting from the shift to alternative energy sources such as LNG imports, leading to increased household and industry energy costs, significant investment requirement for energy infrastructure development to ensure adequate energy security, the potential financial and logistical challenges associated with shifting to new energy supply sources and routes, a disproportionate impact across member countries especially those that had the highest dependency on Russian gas supplies and limited access to a diversified portfolio of alternative energy sources or access to strategic energy storage and a strain on public finances to meet the financing requirements of the transition.”

“Almost three years ago, the EU’s resilience was put to the test. In 2025, the EU has a new opportunity to free itself from its dependency on Russian gas. Increasing renewable energy generation plays a key role. In the first half of 2024, wind power overtook gas to become the EU’s second-largest source of electricity (behind nuclear), and renewables generated 50% of the bloc’s electricity. The EU’s greenhouse gas emissions fell by 32.5% from 1990 to 2022, while the EU economy grew by around 67% in the same period. The EU is leading the initiative to triple renewable energy capacity and double energy efficiency improvements by 2030 – aims that were endorsed by all parties at COP28 in Dubai.”

“Moving away from Russian energy offers Europe greater security and opportunities to diversify its energy mix, particularly through renewables. The ability to replace Ukrainian transit volumes with LNG and other pipelines highlights the flexibility of Europe’s energy system. However, there are hurdles, such as managing short-term price spikes. Continued investment in interconnectors and harmonizing regulations across member states will be essential to fully realize these benefits and address the challenges.”

“The economic benefits include the creation of green jobs, reduced geopolitical risks, and heightened energy independence. Conversely, the higher short-term costs and risks of energy shortages during the transition phase will pose challenges. An additional strategic opportunity for Europe is the potential construction of a gas pipeline from Qatar to Europe via Turkey. Such a project would further diversify energy supplies, enhance energy security, and foster regional cooperation. However, it faces challenges including high costs, geopolitical tensions, and environmental concerns. If implemented, it could strengthen Qatar’s position as a major gas supplier and contribute to Europe’s energy transition.”

DevelopmentAid: What role can international development organizations play in supporting energy transition and mitigating its social impacts in vulnerable regions?

“International aid and development organizations have access to resources and expertise which can be carefully deployed towards specific objectives that seek to ensure an orderly and successful energy transition in Europe. Several ways in which these organizations can help include the provision of financial support by development financial institutions such as the World Bank and European Investment Bank through their funding schemes for renewable energy investments, technical expertise through technical assistance programmes to facilitate rapid deployment of renewable energy technologies and innovative solutions including grid improvements and energy storage. They may also provide capacity-building programs to develop knowledge and skills for the new energy systems, support policy development and provide technical support for its implementation, and funding for research and development in energy transition and, depending on their mandate, offer emergency relief response to situations that require interventions to mitigate the challenges and impacts of the energy transition on the population.”

“International aid and development organizations play a crucial role in encouraging projects that both support the energy transition and help to mitigate its impacts in vulnerable regions. These projects could be focused on making clean energy more accessible and removing the bottlenecks that restrict deployment. As reported by Wind Europe, Europe gets 20% of its electricity from wind, but the future is not clear because not enough new wind farms are being built. The industry has called for urgent action to accelerate permits, grid connection requests, and electrification. The EU has made progress in ensuring secure and affordable energy for all and is trying to meet an 11.7% final energy consumption reduction target by 2030, but greater efforts are needed to increase energy efficiency mechanisms and to electrify heating equipment and grids.”

“International organizations can play a vital role in easing the transition, particularly in vulnerable regions like Moldova. For instance, Moldova has relied on EU support to access alternative gas supplies and reduce its dependence on Russian energy. Addressing Moldova’s reliance on Russian gas for electricity in the Transnistrian region highlights the importance of targeted support to mitigate social and economic impacts.”

“International aid and development organizations play a crucial role by providing technical assistance, funding renewable energy projects, and supporting vulnerable communities affected by rising energy costs. Social mitigation measures, such as subsidized energy access and skill development programs, can address the socio-economic impacts of this transition.”

DevelopmentAid: How prepared is the European gas infrastructure to handle non-Russian energy supplies, and what investments are still needed to ensure long-term energy stability?

“There has been significant progress in making the European gas infrastructure flexible enough to handle non-Russian energy supplies as confirmed by the European Commission and Member States in light of the previous preparations. The Commission maintains regular monitoring of the situation and communications with the Member States and market participants to ensure the security of supply. Some features of this infrastructure preparedness include enhanced LNG import capacity which has seen new terminals and floating storage regasification units (FSRUs) being established in Germany and the Netherlands, and the establishment of alternative supply sources and routes including gas supplies via pipelines from Norway and North Africa, and LNG imports from the United States and Qatar. They also include strategic reserves enhancement to mitigate supply disruptions with current storage levels reported to be at 72%, slightly higher than the average (69%) for this time of year and sustaining investment in renewable energy sources such as wind, solar, geothermal energy, and hydropower. Investment also continues to be sustained for energy infrastructure such as smart grids and energy storage systems, energy efficiency in buildings, industries, and transportation, as well as funding for research and innovation in clean energy technologies and established enabling frameworks that are facilitating private sector investment in energy transition. All these measures will eventually lead to ensuring long-term energy stability in Europe.”

“Europe’s LNG infrastructure is well prepared to handle non-Russian energy supplies. While the EU has invested in LNG infrastructure, its LNG demand has been decreasing. This resulted in a 42% average utilization rate for the EU’s LNG terminals in 2024. Since Russia’s full-scale invasion of Ukraine, Europe has added 82 bcm of new LNG regasification capacity, of which the EU has contributed 74 bcm. The investments needed to ensure long-term energy stability are grid electrification, renewables and energy efficiency solutions.”

“Europe’s gas infrastructure has proven to be highly adaptable, with LNG terminals and pipelines offering robust alternatives to Russian supplies. Projects like the Poland-Slovakia gas interconnector and expanded LNG capacities in Germany, Greece, and Italy have bolstered energy security. However, further investments are needed to harmonize gas standards, enhance storage, and address regulatory gaps, particularly in Central and Eastern Europe. The EU’s proactive measures, such as filling gas storage to over 95% and reducing demand, have prepared it well for the winter of 2024-2025, ensuring energy stability for the long term.”

“While Europe’s gas infrastructure has made significant strides, gaps remain. Investments in storage facilities, interconnectors, and grid upgrades are vital to ensure resilience and long-term stability. Accelerated support for renewable energy and innovative technologies will further cement Europe’s energy independence.”

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