Europe cannot buy its way out of gas dependence

The Commission's March REPowerEU communication places affordability, security and the energy transition inside the same emergency response. Russia's invasion of Ukraine has made reducing dependence on Russian fossil fuels an immediate strategic priority. The communication points towards diversification and lower fossil-fuel use rather than treating another supplier as a complete solution. [1] The distinction should guide Europe's choices over the coming months.

Buying alternative gas is necessary where homes and industry cannot adjust quickly. But Europe could spend heavily on replacement supply and still emerge from the crisis structurally vulnerable: exposed to internationally traded fuel, expensive marginal deliveries and the political choices of a smaller group of exporters. The relevant measure of security is not simply the passport of the seller. It is the amount of unavoidable consumption that can be disrupted or repriced.

The winter in front of us

Emergency planning and structural investment operate on different clocks. An existing import facility might help immediately. A new industrial process or a large building renovation programme cannot. Policy should make that difference explicit. Otherwise long-term projects will be defended using urgent needs they cannot meet, while inexpensive near-term savings will be neglected because they lack the visibility of a major supply announcement.

A useful first step is to divide proposed measures by their earliest plausible contribution. The question is when a measure can reduce exposure, not when ministers can announce it. Technical assessment should cover available equipment, installation capacity and network connections. A nominally rapid project can become slow if it competes for the same scarce engineers or components as several neighbouring countries.

That approach also changes how public support is evaluated. A short-term supply arrangement may be justified as insurance even if it is not the cheapest option in normal conditions. A long-lived asset requires a different test: whether it remains useful as fossil-fuel demand declines. Combining those decisions in one large emergency budget makes it harder to identify the costs of insurance and the risks of unnecessary capacity.

Demand is part of security

Saving energy is often presented as an individual moral appeal. In this crisis it is also a collective bargaining instrument. The less essential consumption Europe must secure at short notice, the less it depends on the most expensive or politically sensitive marginal shipment. A small reduction at a system bottleneck can matter more than a larger reduction somewhere that cannot relieve the constraint.

This is an analytical proposition, not a claim that every saving has the same value. Turning down a poorly insulated household's heating may impose a substantial welfare cost. Repairing a control system in a commercial building might achieve a reduction with little loss of service. Governments should seek the cheapest reductions in social terms, not celebrate a uniform percentage without examining how it is achieved.

An operational programme could begin with public buildings, heating controls, maintenance and accessible industrial efficiency measures. These examples do not eliminate the need for deeper renovation. They recognise that the order of work matters when installation capacity is limited. Public procurement can aggregate demand for standard improvements, while publishing performance results can help distinguish real savings from optimistic sales claims.

Price signals still matter

Households need protection from an abrupt increase in essential living costs. Businesses providing indispensable services may need temporary assistance. Yet a policy that makes every unit of fuel artificially cheap can undermine the same demand reduction that strengthens security. The more consumption a government subsidises, the more money it may need to spend competing for replacement supply.

A preferable starting point is support linked to household need rather than unlimited fuel use. A basic entitlement, a targeted transfer or assistance with efficiency improvements can preserve protection while leaving an incentive to economise at the margin. The exact design depends on administrative capacity and housing conditions. There is no virtue in a theoretically elegant programme that reaches vulnerable households only after the bill becomes overdue.

Tenants illustrate the difficulty. They may pay the energy bill without controlling insulation or heating equipment. A price signal alone cannot resolve that split incentive. Renovation support needs conditions governing rent increases, access and the division of savings. Otherwise a security programme could improve a property owner's asset while leaving its occupant unable to remain in the home.

Contracts are infrastructure

Changing the source of gas can reduce one concentration risk while creating another. An importer should examine the flexibility of a contract, its exposure to price changes, the infrastructure required and the ability to reduce purchases later. A politically friendly supplier is not necessarily a guarantee of an affordable marginal cargo during a simultaneous international shortage.

European coordination can help prevent governments from bidding against one another for the same scarce delivery. But joint action should not become a promise to buy unlimited fuel at any price. The procurement objective, risk allocation and exit provisions need to be clear. Otherwise collective purchasing could socialise contractual risks while private users retain the benefits of favourable conditions.

There is also a diplomatic cost to relying exclusively on purchasing power. If Europe attracts limited supply away from poorer importing countries, it may reduce its own immediate vulnerability while worsening others'. That possibility does not prohibit emergency procurement. It strengthens the case for accelerating demand reduction and for discussing energy affordability with partners rather than treating the global market as an apolitical warehouse.

Building options before they are needed

A new terminal or pipeline is not automatically a mistake. Its strategic value may lie in providing access during disruption, even if normal utilisation remains modest. The relevant calculation should compare its insurance value with capital cost, environmental effects and credible alternatives. High utilisation is a commercial success measure; it is not always the appropriate measure for a reserve asset.

Conversely, describing an asset as adaptable to future fuels should not end the analysis. Conversion requires a technical pathway, a likely customer and a financing plan. A general promise of future compatibility cannot justify any present investment. Independent scrutiny should test which components are reusable, what additional spending would be required and who bears the risk if conversion does not occur.

Planning should also compare supply infrastructure with efficiency and electrification that provide the same security benefit. A capacity auction for avoiding peak demand might sometimes be more economical than additional import capacity. Elsewhere it will not. Europe needs a common way to compare those options, including the time they take to become operational, rather than separate budget lines that never meet.

The argument from industry

Industrial users can reasonably argue that demand reduction is a polite term for lost production. Some processes cannot reduce fuel use without closing or damaging equipment. Governments should not assume that aggregate savings reveal painless efficiency. The distinction between technical improvement and destroyed economic activity is central to judging the response.

That is why support should finance adaptation where a viable route exists and temporary continuity where interruption would damage essential supply chains. It should not promise to preserve every pre-crisis business model indefinitely. Transparent criteria can identify strategic functions without turning every large employer into a national-security exception. Workers affected by unavoidable adjustment also need support independent of whether their current employer receives a subsidy.

Local implementation deserves as much attention as the headline strategy. Municipalities need practical templates for procurement, building assessment and household communication. A European programme that depends on thousands of separate local decisions will fail if each authority must design its own technical process from the beginning. Shared documentation and pooled expertise can reduce administrative costs without imposing an identical solution on buildings with different climates, owners and uses.

A better measure of progress

Europe should judge the response by reduced exposure during adverse conditions, not only by the volume of alternative imports secured. Useful measures include the amount of essential demand that remains inflexible, the speed of connecting alternatives and the extent to which vulnerable households can maintain adequate services at an affordable cost.

Information about success should separate weather effects, temporary production losses and durable technical change. A mild season can flatter an energy policy; a closed factory can make a consumption chart look encouraging. Neither necessarily demonstrates greater resilience. The purpose of measurement is to find out which interventions would still protect Europe in a less favourable year.

An immediate audit of public procurement could identify equipment already available for delivery rather than merely promised by suppliers. Publishing realistic installation windows would help households and firms plan. It would also make it harder for a programme to count signed orders as if the associated energy savings had already occurred.

The strategic opportunity is to make emergency spending purchase a different future. Diversification can bridge the immediate gap. Efficiency, flexible demand and well-planned electrification can reduce the size of that gap permanently. REPowerEU will deserve its name if it changes the conditions under which Europe must buy energy, rather than merely arranging a more expensive version of the dependence it is trying to escape.