European buyers are unlikely to return to Russia's energy sector if sanctions are lifted, as the bloc has diversified its power mix with renewable energy and alternative gas suppliers, ministers and executives said at a conference in Houston.
Ukraine has agreed to accept a U.S. proposal for an immediate 30-day ceasefire and to take steps toward restoring durable peace after Russia's invasion, according to a joint U.S.-Ukraine statement on Tuesday.
The U.S. government is studying ways it could ease sanctions on Russia's energy sector as part of a broad plan to enable Washington to deliver swift relief if Moscow agrees to end the Ukraine war, Reuters reported last week.
"Do we really want to be dependent on energy from an aggressor like Russia? Obviously not," European Union (EU) Energy Commissioner Dan Jorgensen said during a panel discussion at the conference on Monday.
The bloc currently receives 13% of its natural gas from Russia, down from 45% in February 2022, owing to the fast deployment of renewable energy, Jorgensen added.
The European Commission put forward an Action Plan last month which will speed up permits for renewable energy projects, change how energy tariffs are set, and increase state aid for clean industries and more flexible power generation.
"We want to be independent of fossil fuels, especially from countries like Russia, for our security," Jorgensen said of the plan.
Solar generation provided 11% of the EU’s electricity mix in 2024, up from 9.3% in 2023, overtaking coal, according to energy think tank Ember. Coal-fired generation fell to less than 10% for the first time since Ember began collating those figures in 2011, according to data in January.
Gas-fired power production fell to a 15.7% share from 16.9% in 2023, according to Ember.
"My magic word in energy security is diversification," said Fatih Birol, executive director of the Paris-based International Energy Agency, on the CERAWeek panel alongside Jorgensen.
NEW MARKETS
While renewable sources are helping Europe shift away from fossil fuel power generation, new markets which emerged following Russia's invasion of Ukraine are likely here to stay.
"We have managed to change from Russian gas to other gas suppliers," Holger Lösch, deputy director general of the Federation of German Industries said in an interview.
"I think the truth is that Europe probably will try to diversify its gas supply further on," Lösch added.
In January, Venture Global Inc's (VG.N) Plaquemines LNG export plant in Louisiana exported more than half a million tonnes of LNG, all to Europe, LSEG, ship tracking data showed.
Europe has other options as well as U.S. LNG, including gas from the Middle East, North Africa and Azerbaijan Lösch said.
"I don't anticipate Europe going back to a place where they're buying significant amounts of energy from Russia. I think that was a lesson learned," Toby Rice, CEO of EQT (EQT.N) said in an interview at the conference.
Market participants may be less keen to commit to staying weaned off Russian supplies if it would lead to cheaper energy, other executives warned.
"Why would we shoot ourselves in the foot by having the highest energy costs?" said Torbjorn Tornqvist in an interview, CEO of one of the world's largest oil traders, Gunvor.
