Renewables offer EU exit ramp from volatile gas markets

The IEEFA analysis highlights that reliance on long-term LNG contracts creates a dual vulnerability for Europe. These agreements trap the continent in multi-decade fossil fuel dependence while failing to guarantee price stability or supply security in a volatile global market. Ana Maria Jaller-Makarewicz, lead energy analyst at IEEFA, argues that the current strategy of betting on imported fuel is untenable given the rapid decline in domestic gas consumption, which fell by 20 percent between 2021 and 2024.

While the European Commission recently introduced an Electrification Action Plan targeting 46 percent electrification by 2040, progress remains uneven. Although 70 percent of EU electricity now stems from homegrown renewables, the broader electrification rate across all energy sectors has stalled at 23 percent for a decade. The urgency of this transition is underscored by the 84-percent surge in LNG imports following Russia’s 2022 invasion of Ukraine. For policymakers, every installed turbine or heat pump serves as a direct hedge against the next energy supply shock.