The European Union is aiming to save over $47 billion on crude oil and natural gas imports with a new plan designed to lower energy prices across the region.
The proposed plan includes measures such as speeding up the approval process for wind and solar projects, introducing a new formula for electricity tariffs, and increasing subsidies for renewable energy. According to a draft document from the European Commission, which is set to be formally presented this week, these measures could save up to 45 billion euros this year. By 2030, the savings could reach 130 billion euros, or more than $13 billion.
EU Energy Commissioner Dan Jørgensen highlighted the importance of these measures, noting that while renewable energy projects require significant investment, the cost of inaction is even higher. “We save money by not buying fuel from outside,” he said, adding that the Commission’s actions are also expected to reduce energy consumption.
While the idea that locally produced energy is cheaper than imports has been widely accepted, it remains more difficult to apply to wind and solar power. This is especially true after a period of low wind in Europe, which forced countries like Germany to turn to hydrocarbons to meet energy demands. Gas prices in Europe also suggest that wind and solar might not always be reliable, especially during winter months.
Nevertheless, the European Commission believes expanding wind and solar power will help address these challenges and reduce the region’s reliance on imported oil and gas. However, questions remain about how the higher subsidies will be funded, as governments typically rely on tax revenues to support such initiatives.
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