Europe is reviewing its gas rationing plans this winter

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.

The European Commission first unveiled the 15% target in its “Save gas for a safe winter” plan last week, which included a proposed new law that, if passed, would give him the power to force states to meet mandatory reduction targets in exceptional circumstances.

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.

Turbine missing

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.

Flows through the pipeline – which last year carried 40% of the bloc’s total pipeline imports from Russia last year – had already been reduced by two thirds in June after Gazprom accused the West of preventing return from another turbine of Canada, where it was being repaired.
Last week, Gazprom reopened the Nord Stream 1 pipeline after 10 days of routine maintenance. Many EU officials feared that Moscow would use the opportunity to keep the faucets closed in retaliation for sanctions imposed following Russia’s invasion of Ukraine.
While Europe’s fears were well-founded — Russia cut off its gas supply several European countries and energy companies in recent months – Gazprom restarted flows without a hitch, but still at just 40% of pipeline capacity.

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.

bad timing

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.

The gradual reduction of Russian gas imports will not be an easy task for many EU countries which have historically based on supplies from Moscow to power their homes and industries.

According to the International Energy Agency, the country accounted for around 45% of the bloc’s total gas imports in 2021.

He has already made great progress. The EU is moving quickly to reduce its dependence on Moscow anyway, accelerate imports of liquefied natural gas and committing to reduce the consumption of its Russian gas by 66% before the end of the year.
Relief in Europe as Russia restarts Nord Stream 1. But it's not out of the woods yet
But a historic heat wave that pushed temperatures past 40 degrees Celsius (104 degrees Fahrenheit) in parts of the continent last week has caused air conditioning demand to prick.

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.

Leave a Comment