Europe cuts gas rationing plans this winter

The EU Commission first unveiled a target of 15% in its scope Save gas for a safe winter Last week’s plan, which included a proposal for a new law, if passed, would give it the power to compel states to meet mandatory cut targets in exceptional circumstances.

The council also detailed a number of scenarios that would allow the reduction target to be mitigated, including cases in which countries exceed gas storage targets or rely specifically on gas to run vital industries.

“I know the decision was not easy. But I think, in the end, everyone understands that such a sacrifice is necessary,” Josef Sekila, the Czech Minister of Industry and Trade, who holds the rotating presidency of the Council of the European Union, said in a newspaper. conspiracy. “We have to do it and we will share the pain.”

Sekila added that the countries had reached a “satisfactory settlement.”

The plan has yet to be written into law – at least 15 of the bloc’s 27 member states, which represent 65% of its total population, still need to agree to the proposals.

Separately, the bloc would need to hold a different vote on the commission’s proposal to enforce the mandatory reduction targets.

Missing turbines

Meanwhile, a gas emergency is developing in Europe.

Gazprom, Russia’s state energy company, said on Monday it would shut down a gas turbine in its Nord Stream 1 pipeline for repairs, reducing flows to 33 million cubic meters per day as of Wednesday – or just 20% of its daily capacity. Gas was flowing at 40% of capacity after Russia cut exports in response to Western sanctions.

European Energy Commissioner Kadri Simsun called the latest cut a “politically motivated move” on Tuesday.

She added that Gazprom’s announcement “emphasizes once again that we must be ready for a possible reduction in supplies from Russia at any moment.”

The news caused European benchmark gas prices to rise 10% on Monday compared to Friday, according to data from the Intercontinental Exchange.

Earlier this month, the Canadian government said turbines made by Siemens could return to Germany under an exemption from sanctions. But Gazprom said on Monday that paperwork received by Siemens to return the turbine did not solve certain problems, again raising the specter of another cut to gas delivery in Europe.

bad timing

The real danger that Moscow might turn off the taps has led to energizing the block to find alternative energy sources and quickly fill gas storage facilities before winter.

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

Earlier this month, Enagas, the operator of Spain’s gas transmission system, said demand for natural gas for electricity production had reached a new record high of 800 gigawatt-hours.

“This huge increase in demand for natural gas for electricity production is mainly due to the high temperatures recorded as a result of the heat wave,” Enagas said in a press release last week.

Rising gas demand coupled with very low Russian flows could severely limit Europe’s ability to fill its stores before temperatures begin to drop in a few months.

The bloc has set a target for gas storage in member states to be at least 80% full by November.

It is currently 67% full, according to Gas Infrastructure Europe. This is much more than the same time last year.

But Fatih Birol, executive director of the International Energy Agency, last week described the situation in Europe as “perilous” and said it should prepare for a “long and harsh winter”.

According to the International Energy Agency, even if European countries manage to fill their gas storages to 90% of their production capacity, they are likely to face supply disruptions early next year if Russia decides to cut gas supplies from October.

– Alex Hardy contributed reporting.