What's going on?
The EU proposed that its member countries cut their gas use on Wednesday.
What does this mean?
Russia already cut capacity of the Nord Stream – one of the main gas pipelines between Russian and Europe – by around 60% last month, almost certainly in retaliation for Europe’s support of Ukraine. So when the pipeline closed earlier this month for maintenance, economists weren’t holding out much hope it would come back on at all. They weren’t far wrong: the Russian government warned on Wednesday that it would restrict supplies to around 20% unless a spat over sanctioned pipeline parts gets resolved.
Not that there’s any guarantee that’ll do the trick either. So the EU is now scrambling to refill its stockpiles ahead of winter, recommending its member states reduce usage in public buildings and switch to alternatives like renewables or coal. It might just work: the plan could cut their gas consumption by as much as 15% over the next eight months – roughly equivalent to the amount France uses in a year.
Why should I care?
The bigger picture: Sharing is caring.
The drop in European gas consumption this year has already knocked 0.2 percentage points off the region’s economic growth, according to the International Monetary Fund. So the IMF has raised a scenario where Russia’s power play now leads to severe recessions, while forcing multiple member countries to shut down swathes of their industry. But it is only a worst case, and the IMF thinks it’s avoidable if only countries share their gas supplies with one another.
Zooming out: When the sun shines, make energy.
Europe’s renewable dreams are starting to take shape, with Germany – which boasts a third of Europe’s solar capacity – now planning to double down on its use of solar in the next decade. And judging by the current heatwave in Europe, it’ll do well out of it: the country produced a record amount of electricity from solar panels earlier this week.