EU energy proposals to focus on gas storage
Price caps or decoupling gas from electricity markets remain a no-go
Stocking up for winter
The European Commission seeks to change existing legislation and oblige member states and commercial operators to fill up gas storage facilities to 90 per cent this year, according to a draft legal text seen by Europe Express that is due to be published tomorrow.
Possible measures with regard to intervention in energy markets should emerge tomorrow, though it is yet unclear what form they will take and the extent to which leaders will discuss them at the two-day summit starting Thursday.
The draft text setting out an obligation to fill up gas storage facilities amends EU legislation on gas security of supply from 2017.
The reasoning is that by filling up its gas storage facilities, the bloc can avoid major supply disruptions next winter, given that relations with Russia are only likely to worsen in the short term.
The text seeks to strike a balance between interventionist capitals that want the EU to set a price cap and/or decouple gas and electricity markets and free marketeers, who insist on doubling down on renewable energy, better isolating buildings and gradually weaning off Russian imports. No government has thus far taken issue with the need to replenish storage facilities.
“The current geopolitical situation requires additional short-term measures to deal with the market imbalances for energy and for securing supplies in the years ahead,” the draft reads. “As supply disruptions of pipeline gas may occur anytime, measures introducing an insurance policy regarding the filling level of EU storage facilities are introduced.”
According to the commission’s analysis, storage supplies 25-30 per cent of gas consumed in winter. But this past winter, with storage facilities at 10 per cent lower than usual, “an unbalanced gas market has led to a sharp increase in gas prices”.
As gas prices are very likely to rise again ahead of next winter, the commission argues that public intervention will be needed, “including financial support to incentivise the use of storage” — and for the filling process to start as early as April and reach 90 per cent by November.
As a side note, the text was drafted without an impact assessment or any external expertise, “due to the politically sensitive and urgent nature of the proposal”, though the commission did consult with stakeholders, it said.