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Surging gas prices in EU result of forced energy transition, its risks should be weighed - Reshetnikov

Interfax Russia & CIS Energy Newswire  


    MOSCOW. Sept 23 (Interfax) - The surge in gas prices in Europe is caused by accelerated refusal of coal power; the economic consequences of particular steps in the energy transition process should be calculated beforehand, Russian Economic Development Minister Maxim Reshetnikov said.

    In September, spot prices in Europe came close to $1,000 per thousand cubic meters amid the gas deficit, whereas a little over a year ago they barely managed to surpass $100.

    "What we are seeing now on the European market in terms of the gas price - we also have to understand that these are actually the consequences of this forced energy transition. The consequences of forced closure of coal-fired generation, which was always an alternative and restrained gas consumption in the case of high prices. This forced departure is fraught with that risk," Reshetnikov said, speaking at a meeting of the Presidium of the Russian Academy of Sciences on the topic "Low-carbon Development Strategies for Russia: Scenarios and Realities."

    "On the one hand, this could create additional opportunities for our country, but at the same time, in making decisions we should weigh all of these risks so that the forced transition to the low-carbon agenda doesn't lead to additional inflation. Primarily, of course, in our country, but also in general we call on our colleagues from other countries to consider all the economic consequences very carefully, because ultimately the global economy is one whole," he said.

    According to Reshetnikov, many countries do not have a clear idea of the price of attaining carbon neutrality by a certain deadline when they declare this as a goal.

    "What is important for us now in implementing the agenda of low-carbon development is, of course, the cost of this agenda; in other words, who is going to pay for implementing these measures, in what volume, and when. Regrettably, in communicating with our colleagues in other countries, we see that some of them approach the announcement of a year for carbon neutrality rather lightly. To the question of what they are going to do with the price rise of the same metal from 20% to 40% in the case of its production using the hydrogen method, and how this is going to influence product exports from our country, we don't receive any clear answers, just as we don't get any answers about who is going to pay for refusing coal and so on," he said.

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