The European Union (EU) can replace Russian gas with green technologies by 2028 with a total capital expenditure of €811 billion ($890 billion), according to a new report on Tuesday from the Oxford Sustainable Finance Group, a part of the Smith School of Enterprise and the Environment at the University of Oxford.

The report, The Race to Replace: The Economics of Using Renewables to Free Europe from Russian Gas, calculates the cost of fully replacing Russian gas for heating and electricity with clean energy.

Russian gas accounted for about half of the EU’s gas supplies in 2021, while its share dropped to 12.9% by the end of 2022, after the EU’s response to Russia’s war in Ukraine, in a bid to end reliance on Russian gas by 2028.

The total expenditure of €811 billion to replace Russian gas with green technologies includes planned spending of €299 billion on clean energy as part of the European Green Deal and an additional investment of €512 billion in renewable energy and heat pumps.

Up to 90% of the required additional investment “could be recouped over the next thirty years by eliminating the need to buy gas,” the report said, although it found that policy changes are needed to enable the transition.

The report found that public and private funds are crucial to achieving an improvement in large-scale deployment of renewables and heat pumps, auctions for utility-scale wind and solar projects while addressing permitting challenges. It also disclosed the need for deploying rooftop solar panels at speed and increasing support for insulation and the installation of heat pumps.

“The transition from Russian gas to clean energy is not only achievable, but offers multiple benefits. Replacing natural gas with wind and solar energy eliminates the need to pay for gas in the future,” said Gireesh Shrimali, co-author of the report and head of transition finance research at the Oxford Sustainable Finance Group.

The EU is estimated to have paid about €5 billion for Russian gas in the first four months of 2023, according to the Centre for Research on Energy and Clean Air (CREA).

“By eliminating reliance on importing a fossil fuel with volatile prices and supply, the EU can alleviate energy security concerns, address the cost-of-living crisis through energy costs, and advance its goals to achieve net zero emissions and tackle the climate crisis,” Shrimali noted.

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