The aim of this study was to assess the impact of prohibiting Russian gas supplies to the European Union on natural gas prices and the supply structure of the EU, the European countries and of the Danube Region, that comprises of both EU and non-EU countries.
To capture the differences, we applied scenario modelling using the European Gas Market Model where differences between the with and without Russian gas situation can be quantified. Two different timelines were proposed for the Russian gas phaseout. The Commission’s proposal was modelled in a 2028 infrastructure and supply-demand situation, while the early implementation proposal of the Parliament was modelled as an overnight ban on Russian gas deliveries.
EU27 RESULTS ON THE REPOWEREU PROPOSAL OF THE COMMISSION
Modelling results show that the Commission’s proposal would result in a very modest price increase across the EU in 2028 without threatening the markets to fall apart into regionally different priced sub-markets. The regulatory measure alone would result in an average increase of 0.3 €/MWh in the EU27 wholesale gas price. This means that the gas bill that the EU pays would increase in total by 1% compared to the scenario where Russian gas would still be available. At the same time the favourable change in market supply and demand conditions by 2028 highly outweigh the negative impact of the Russian gas phase out. Combining the market and regulatory effects, the overall price change would reduce the total gas bill by about 15% from 2024 to 2028 with no Russian gas.
EU27 RESULTS OF AN OVERNIGHT RUSSIAN GAS PHASE OUT
However, these positive results change when the Regulation is implemented too early: as the overnight modelling results shows, there is a pressing need for new alternative supplies especially in the Central Eastern European region and the Balkans. The new Romanian offshore gas resources and the additional supply of new LNG production facilities are key to balance the missing Russian volumes. Without these, the price impact is much higher and more importantly the spread between gas markets would emerge that would necessarily also spread over to the electricity markets, as natural gas-fired power plants are usually the price setting units. Overnight effects in Western and Northwestern Europe are around +1 €/MWh increase in the 40 €/MWh price environment. In the Central and Eastern European region the price impact is in the range of + 2-3 €/MWh (Czechia, Austria, Slovakia, Hungary, Italy). The highest impact is measured in the Balkans, Romania, Bulgaria and Greece, an additional +4-5 €/MWh price increase. The total gas bill would increase by 4% for the EU27.
CONCLUSIONS
The Commission’s original proposal is a well-designed plan to phase out Russian gas from the EU 27 without placing an excessive financial burden on the EU gas consumers. Even this minor burden would be shared equally across Europe, as the price increase would not differ between regions.
Results with a V4 focus were presented at CEEC 2025 conferene in Bratislava.
