On Tuesday, EU energy ministers agreed on a voluntary target to reduce gas consumption by 15% between August and March 2023. This reduction is measured against each country’s average gas consumption in the same months in the previous five years.
But objections from some countries in recent days have prompted the bloc to make key concessions, taking into account their different levels of gas dependence and storage levels.
The EU will now exempt countries that are not interconnected to other members’ gas networks from the mandatory 15% demand reduction target, because “they would not be able to free up significant volumes of pipeline for the benefit of ‘other member states’, according to the Council of the EU, the bloc’s political union, said in a press release.
The Council also detailed a number of scenarios that would allow the reduction target to be relaxed, including where states exceed their gas storage targets or are particularly dependent on gas to power critical industries.
“I know that the decision was not easy. But I think that in the end everyone understands that this sacrifice is necessary,” said Jozef Síkela, the Czech Minister of Industry and Trade, who assumes the rotating presidency of the Council of the EU, during a press conference. conference. “We must do this and we will share the pain.”
Síkela added that the countries had reached a “satisfactory compromise”.
The plan is not yet enshrined in law – at least 15 of the bloc’s 27 member states, representing 65% of its total population, have yet to approve the proposals.
Separately, the bloc will have to vote differently on the Commission’s proposal to apply mandatory reduction targets.
Meanwhile, a gas crisis is developing in Europe.
Gazprom, Russia’s state-owned energy company, said on Monday it would shut down a gas turbine on the Nord Stream 1 gas pipeline for repairs, reducing throughputs to 33 million cubic meters a day from Wednesday, just 20% of its daily capacity. Gas was flowing at 40% capacity after Russia cut exports in response to Western sanctions.
Kadri Simson, European Commissioner for Energy, on Tuesday called the latest reduction “a politically motivated step”.
She added that Gazprom’s announcement “underscored once again that we must be ready at all times for possible supply cuts from Russia.”
The news sent benchmark gas prices in Europe up 10% on Monday from Friday, according to data from the Intercontinental Exchange.
Earlier this month, the Canadian government said the Siemens-made turbine could return to Germany under a sanctions waiver. But on Monday, Gazprom said documents received by Siemens to repatriate the turbine had not resolved some issues, again raising the specter of further cuts in gas deliveries to Europe.
The very real risk that Moscow could turn off the taps prompted the bloc to find alternative energy sources and quickly fill its gas storage facilities ahead of winter.
According to the International Energy Agency, the country accounted for around 45% of the bloc’s total gas imports in 2021.
Earlier this month, Enagas, Spain’s gas transmission system operator, said demand for natural gas to generate electricity hit a new record high of 800 gigawatt hours.
“This huge increase in demand for natural gas for power generation is mainly due to the high temperatures recorded following the heat wave,” Enagas said in a press release last week.
Strong gas demand combined with greatly reduced flows from Russia could significantly limit Europe’s ability to fill its reserves before temperatures start to drop in a few months.
The bloc has set a target for petrol stores in member states to be at least 80% full by November.
They are currently around 67% full, according to Gas Infrastructure Europe. This is much more than at the same time last year.
But Fatih Birol, executive director of the International Energy Agency, last week called the situation in Europe “perilous” and said it needed to prepare for a “long and harsh winter”.
According to the IEA, even if European countries manage to fill their gas reservoirs to 90% of their capacity, they are still likely to face supply disruptions early next year if Russia decides to cut off gas deliveries from October.
— Alex Hardie contributed reporting.