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Repsol CEO: Europe needs to rethink its energy transition

Josu Jon Imaz, Chief Executive Officer of Repsol, delivers a speech at the company’s annual general meeting in Madrid, Spain May 19, 2017. REUTERS/Paul Hanna

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MADRID, Sept 7 (Reuters) – Europe must reconsider its energy transition as it discourages investment in some sources on ideological rather than technological grounds, the chief executive of Spain’s largest oil and gas company Repsol (REP.MC) said on Wednesday.

According to Josu Jon Imaz, the Russian invasion of Ukraine was not the only reason for gas prices to rise.

“We have opted for an ideological energy transition in Europe, in which we choose or reject investments in certain energy sources for ideological reasons and not for technological reasons,” Imaz said at an energy event in Madrid.

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“The consequence is that consumers can pay more for energy and companies cannot pay for energy and CO2 (emissions) increase. We need to rethink all of this. We need all energy sources,” he said.

Repsol has embarked on a comprehensive renewable energy development plan, planning to install 20 gigawatts of wind, solar and hydroelectric power plants by 2030, and plans to invest part of the $4.8 billion that will it from selling a 25% stake in its oil business to renewable projects.

Spain is a leader in the development of renewable energy. With ample sunlight, blustery hillsides, and vast plains, Spain is transitioning its energy system to renewable sources and expects its economy to become carbon neutral by 2050.

Among the excluded energy sources, Imaz cited shale-based natural gas, which is banned in Spain and other European countries due to environmental concerns such as groundwater pollution.

The development of European gas production would have made Europe more independent from Russia, said Imaz.

Russia’s invasion of Ukraine in February sparked an energy crisis in Europe, as the European Union responded to Moscow’s moves with sanctions and a promise to reduce dependence on Russian energy, while Russia in turn cut or halted gas supplies.

According to Imaz, the energy transition in Europe has exacerbated the current crisis and has failed to address the main issue it is designed to address – carbon emissions.

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Reporting by Inti Landauro and Christina Thykjaer, writing by Emma Pinedo; Edited by Bernadette Baum

Our standards: The Thomson Reuters Trust Principles.

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