One in four households living in fuel poverty says campaigner

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Russia’s invasion of Ukraine has been powered by the country’s massive dominance in the fossil fuel industry. Europe is heavily dependent on Moscow for its energy supplies, accounting for about 45 percent of its natural gas imports. Russia’s invasion, along with the threat of Putin cutting off supplies to Europe, has pushed wholesale energy prices to record levels.

This only benefits the Kremlin as its means that the fuel-starved bloc is paying Russia more for its energy.

But the EU has been handed a lifeline out of the energy crisis, as European Commission President Ursula von der Leyen and European Council President Charles Michel held a joint statement in Tokyo for their first in-person EU-Japan summit.

In the statement, the two sides pledged further cooperation saying: “The Russian aggression against Ukraine reverberates strongly in international energy markets, leading to further significant price increases of fossil fuels and electricity globally.

“The EU expresses appreciation to Japan for the solidarity shown earlier this year in ensuring sufficient and affordable liquefied natural gas (LNG) supplies to EU markets.

“In the light of sanctions on Russia, we will cooperate to keep global energy markets stable and help ensure each other’s security of supply, in particular for the supply of LNG.

“We will take immediate action to accelerate the energy transition based on energy efficiency and the large-scale deployment of clean, safe and sustainable energies.”

Even before the invasion of Ukraine, Japan had been redirecting cargo shipments of LNG towards the EU to help offset global energy prices, as Russia began decreasing the flow of gas to apply political pressure on the bloc.

The statement continued: “We will cooperate to reduce Europe’s dependency on energy supplies from Russia and to ensure diversification of energy supply sources, and acknowledge the need for investments to achieve this.”

Wholesale gas prices in the UK yesterday plummet to a fifth of that in Europe, as an unprecedented supply of LNG drops the fuel costs to pre-crisis levels.

LNG cargoes have been arriving at terminals in Britain with the goal of transferring them further through the national network and then on to Europe via subsea pipelines, easing their energy costs.

However, an expert at Stifel said: “The rate of LNG imports has exceeded the ability of the interconnector pipelines to export gas, leading to an imbalance in gas supply and demand in the UK, amplified by the UK’s lack of meaningful gas storage capacity compared to other European gas consumers.”

In Britain, the current day-ahead prices have dropped to 40p a therm, record low levels that were last seen before the energy crisis.

This is far lower than the 500p a therm fuel costs in March, and the 200p a therm prices in mainland Europe.

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