How Europe Could Undermine Vladimir Putin's Plan To Hold Energy Hostage

European leaders have assessed several ways they can undermine Vladimir Putin's efforts to hold the continent hostage over energy amid the ongoing war in Ukraine.

Russia gave the European Union (EU) an ultimatum earlier this month and said its Nord Stream 1 pipeline would not resume until sanctions against the country were lifted.

EU leaders joined other nations in condemning Russia's invasion of Ukraine and issued several crippling sanctions against key individuals supported by the Kremlin as well as against the country itself.

This week, European Commission President Ursula von der Leyen hit out at Moscow and said it was "actively manipulating the gas market," but insisted the continent would "diversify away from Russian fossil fuels."

In March, President Joe Biden and von der Leyen announced a joint Task Force to reduce Europe's dependence on Russian fossil fuels and secure Europe's energy security.

The race is now on in Europe to mitigate the looming energy crisis leading some countries to experience winter blackouts or energy rationing.

One way Europe could avoid crippling energy consumption costs would be to double the current global rate of energy intensity improvement—meaning improving energy efficiency—to 4 percent, according to the International Energy Agency.

It could potentially avoid 95 exajoules—a measure of energy—a year of final energy consumption by the end of the decade compared to current rates. The equivalent of such a change would be the annual energy use of China and could reduce global CO2 emissions by another 5 billion tons a year by 2030.

It would represent a third of the total emissions education efforts needed this decade to move the world onto the pathway to net zero emissions by the mid-century, as laid out in the Net Zero Roadmap that the IEA published in 2021.

These efficiency efforts could lead to households saving as much as $650 billion a year on energy bills by the end of the decade.

The amount of natural gas that the world would avoid using would be equal to four times what the EU imported from Russia in 2021.

This reduction could create 10 million new jobs in several fields including building retrofits to manufacturing and transport infrastructure.

In a 10-point plan by the IEA, 10 options were given that could avoid the energy crisis in Europe.

First, leaders are encouraged not to sign new gas supply contracts with Russia as it could give the EU an opportunity to diversify its gas supply and reduce the take-or-pay levels for Russian imports.

The IEA also asks EU leaders to replace Russian supplies with gas from different providers, including Norway, that would reduce its reliance on Moscow's gas.

EU leaders have also been told to introduce minimum gas storage obligations to enhance market resilience, although the IEA states higher requirements to refill storage in 2022 would add to gas demand and prop up prices.

Refocusing on new wind and solar projects could result in bringing down gas use by 6 billion cubic meters (bcm).

Maximizing generation from existing low-emission sources, such as nuclear, would result in reducing gas use for electricity by 13 bcm, according to the IEA.

The IEA said to enact short-term measures to protect vulnerable electricity consumers from high prices. It is estimated by doing so would bring down energy bills for consumers and make 200 billion euros ($203 billion) available to help vulnerable groups.

By speeding up replacement gas boilers with heat pumps, the EU could reduce gas use for heating by an additional 2 bcm in one year.

Accelerating energy efficiency improvements in buildings and industry could cut gas consumption for heat by another 2 bcm and lower energy bills.

In a more direct plea to consumers, the IEA has asked consumers to turn down the thermostat by 1 degrees Celsius and claimed it would reduce gas demand by 10 bcm a year.

The IEA encouraged EU leaders to step up efforts to diversify and decarbonize as part of a long-term strategy that would reduce reliance on natural gas and reduce expensive gas-intensive peak supply needs.

Danfoss, a global supplier of advanced energy-efficient technologies, has also offered plans that could save Europeans 12 billion euros ($12.18 billion) by upgrading 500 million radiators that needlessly waste energy.

Speaking to Newsweek, Danfoss President and CEO Kim Fausing said the Russian invasion of Ukraine has presented an incentive to reduce gas and oil consumption but stressed it could not all be about making green energy.

He said: "They will also be extremely expensive and more expensive than needed. We need to get the efficiency cobbled to it, and we need to get behind it and start to invest in it with the same passion we do.

"Because energy efficiency and renewables go hand in hand. If we do both, we can reach those targets that are not easy targets that are set, but we can reach them. It's doable."

He said how vital it was for countries to work together and added: "There's so many low hanging fruits and attractive steps we can do. But it's just more intuitively difficult to see it. From the big picture. It's easy to understand wind turbine, green energy, good. Instead of touching your infrastructure, right?

"We need to make this happen if we want to reach the Paris Agreement, targets, right. And that's what I hear all the time we do. And the news and the clarity is, this will not happen.

"It will not happen if we don't get the efficiency up in our system because we have to produce a lot of energy we actually don't need and that's why we have this tagline to say the best and the most greenest energy is the energy we don't need."