EU Commission draft sets 100 GW annual renewables target and two-thirds cut in European gas use
The plan demands a step-change in Europe's renewable build rate while current storage obligations and a parallel gas subsidy review pull in the opposite direction.
The European Commission has circulated a draft plan targeting 100 gigawatts of new renewable capacity annually and a 66% reduction in European gas consumption, Montel reported. That build rate would represent a substantial step up from recent European averages, setting an ambitious trajectory for a continent that still depends on gas for much of its power and heat generation.1
The same Commission signalled on Monday (2026-05-18) that it was prepared to assess member state measures to subsidise the fuel costs of gas-fired power generation, aiming to reduce electricity prices. Backing gas subsidies while targeting a 66% gas reduction reflects the difficulty facing Brussels in managing industrial electricity costs across 27 member states, particularly those with limited near-term alternatives to gas-fired capacity.1
Near-term supply needs run counter to the long-run direction. The Oxford Institute for Energy Studies estimated in a study on Wednesday (2026-05-20) that Europe would need 6% more gas this year — roughly 6 billion cubic metres above 2025 volumes — to enter next winter with equivalent storage levels. Weaker demand would help offset that requirement, the OIES said, but only partially.2
Under current EU rules, member states must reach a 90% storage target between October 1 and December 1, with five percentage points of flexibility. Energy Traders Europe's gas committee chair told Montel that a strategic European gas reserve would be the "lesser of two evils" compared to mandatory storage targets, arguing the latter distort market prices by forcing procurement across a predictable seasonal window.4
But storage obligations run on a schedule that a multi-decade renewables directive cannot alter. The October compliance window will arrive whether or not the draft survives Council negotiation, and the 6 bcm incremental volume identified by OIES will need to come from LNG imports, remaining pipeline flows, or demand reduction. ICE Endex TTF front-month gas was trading at €51.44 on Tuesday (2026-07-14), down 2.83% on the session.2
Gas's share of European power generation is already contracting. Gas accounted for a declining share of the global electricity mix for the fifth consecutive year in 2025, with Asia-Pacific regions also recording displacement by cheaper alternatives, RenewEconomy reported. The structural retreat from gas-fired generation appears driven by economics as much as by policy mandates.6
Russian supply adds a further variable to the European balance. Production fell 3.2% in the first half of 2026 to approximately 334.8 billion cubic metres by June, according to Bloomberg citing federal statistics, with LNG output declining 5.1% to around 16.5 million tonnes. Exports via the Power of Siberia pipeline are projected to rise more than 20% this year toward the line's 38 billion cubic metre annual capacity, but that increment flows east to China rather than into European terminal networks.3
In the Nordic region, a current hydro deficit is adding pressure to cross-border power flows. A sharp expansion in EU renewable output could limit that deficit's price impact by spurring imports, analysts told Montel, but the capacity additions required to shift that balance meaningfully represent years of build-out, not a near-term buffer.5
How much of the draft's ambition survives Council negotiations, and on what timeline renewable additions translate into actual fuel switching, will shape whether the near-term gas procurement burden falls on storage buyers or is deferred into longer-run infrastructure investment. The October compliance deadline is fixed regardless.2,4