Spanish Prime Minister Pedro Sanchez has said his country — and southern Europe more broadly — could provide an answer to the shortfall in gas supplies from Russia as the region looks to double down on sanctions against Moscow.
"Spain and, I would say, Southern Europe, will have a chance to provide an answer to this energy dependence of Russia fossil energy," Sanchez told CNBC at the World Economic Forum in Davos late Monday.
Sanchez highlighted that Spain represents 37% of the European Union's total regasification capacity — where liquefied natural gas is turned back into the end product of natural gas. He also said the Iberian Peninsula, occupied by Spain and Portugal, is home to around half of the EU's LNG storage.
"This war also gave us a very important lesson, which is that renewable energy, hydrogen, energy efficiency is not only a great ally for countries and economies to tackle the climate change efforts, but also in this very complex and very uncertain geopolitical scenario that will provide us also means to increase our resilience and autonomy," he added.
Energy prices have soared this year as Russia's onslaught in Ukraine destabilized the markets and Western nations slapped sanctions on Moscow. Prices on the Dutch TTF hub, a European benchmark for natural gas trading, more than tripled between Feb. 16 and Mar. 7 as Russia launched the unprovoked invasion of its neighbor.
The issue of energy security — and soaring energy prices — has been front and center in the political debate in Spain, with Madrid being one of the most vocal capitals about the need for European action to bring down prices for consumers.
Together with neighboring Portugal, Spain has introduced a temporary cap on the price of natural gas and coal — a move that sets them apart from most of the rest of the EU.
Sanchez said the EU's energy market is not fit to respond to the current crisis. "This is just the beginning of a big reflection that we need to face at the European level," he said.
Spain angered Algeria earlier this year after Madrid decided to re-export gas to Morocco, amid a diplomatic standoff between the two North African nations who share a land border.
Sanchez on Monday dismissed the idea that Spain was substituting Russia for another unstable supplier Algeria, which has threatened to shut off gas flows to Madrid due to its deal with Morocco.
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