LEAK: in anticipation of an uncertain winter, the EU is preparing to reduce gas consumption

LEAK: in anticipation of an uncertain winter, the EU is preparing to reduce gas consumption

The European Commission is drawing up plans to help EU Member States reduce demand for fossil gas and, if necessary, reduce consumption in the face of “a probable deterioration in the outlook for gas supplies” this winter. This is according to leaked policy proposals seen by EURACTIV.

Over the past few months, Russian gas supplies have dwindled in a “deliberate attempt [de la Russie] to use energy as a political weapon”pushing up energy prices and raising concerns about Europe’s supply for next winter.

The supply to the Baltic States, Poland, Bulgaria and Finland has already been interrupted. Supply to Germany, Denmark, the Netherlands and Italy has been reduced and flows through Nord Stream 1, the main import route to the EU, have been reduced by 60% .

“There is no reason to believe that this trend will change. On the contrary, a number of signs, including the latest decision to further cut supplies to Italy, point to a likely deterioration in the gas supply outlook.”says the Commission in a new document consulted by EURACTIV.

“Saving gas for a safe winter”

The document, which should be published on Wednesday (July 20), has an explicit title: “Saving gas for a safe winter”.

While the European Union presented plans in May for a gradual exit from Russian fossil fuels and to strengthen its security of supply, full energy independence from Moscow was not envisaged before 2027 at best. Today, the block must prepare for the “significant risk” of a complete shutdown of Russian gas supplies this year, warns the Commission.

The regulation aimed at guaranteeing the security of gas supply adopted in 2017 defines three national crisis levels: “early warning”, “alert” and “emergency”.

“Alert” level

The EU is currently in the early warning stage, but on July 20 it will move to the alert stage, the document reads. That means “that there is concrete, serious and reliable information that an event likely to cause a significant deterioration in the gas supply situation could occur and trigger the triggering of the emergency level in several Member States”.

This situation requires instruments to reduce the demand for gas, to strengthen daily monitoring and information, to take measures for the industry to reduce its demand, to replace gas with other fuels and to limit heating. at 19°C and air conditioning at 25°C in public buildings, unless this is not technically possible.

Reduce demand

According to the draft document, the EU gas sector has “more than compensated” the reduction of 25 billion cubic meters (bcm) of Russian gas imports with 35 bcm of liquefied natural gas (LNG) and gas transported by pipelines elsewhere.

However, according to estimates by the European Network of Transmission System Operators for Gas (ENTSO for Gas), a complete interruption of Russian gas supply would have “probably as a consequence” that the EU would not reach its 80% storage target, maybe even “from 65 to 71%”which would result in a deficit of 20 billion cubic meters for the winter.

This means that several EU Member States would risk ending up with levels “very low at the end of winter”which would make it difficult to rebuild stocks for the following year.

To anticipate this situation, the “demand reduction plan” proposed by the Commission aims to reduce the gas consumption of protected groups, such as consumers and essential services, as well as unprotected groups, such as industry. It is also considering more extreme reduction measures if the situation becomes critical.

“Coordinated action now will be more cost-effective and less disruptive to our daily lives and to the economy than improvised action later, when gas supplies may run out”reads the leaked document.

“Protected” customers invited to contribute too

Under the Security of Gas Supply Regulations 2017, vulnerable consumers who “do not have the means to ensure their own supply” are protected by European legislation. This definition covers private households, essential social services and small businesses.

The regulation also introduced a solidarity mechanism which provides that EU states “must help each other to always guarantee the gas supply of the most vulnerable consumers”even in difficult gas supply situations.

But while citizens are protected, the European Commission outlines gas-saving measures that can be taken to avoid restrictions in other sectors.

This involves, in particular, making “significant savings” on heating by conducting gas saving campaigns with households, in particular by lowering thermostats by 1°C and by imposing a reduction to 19°C for the heating of public buildings, offices and commercial buildings.

The European Commission is also calling on Member States to consider replacing gas with other fuels for electricity generation, including coal and nuclear power.

The Commission, which seems to be targeting Germany, invites the Member States to postpone their plans to phase out nuclear power until it is technically possible, stating that these national decisions “must take into account the impact on the security of supply of other Member States”.

The EU executive admits that the temporary switch from gas to coal “may lead to increased emissions” and that renewable energies remain the top priority. It also points to a temporary relaxation of the rules on industrial emissions to allow more leeway for industry.

With regard to industry, the Commission presents measures that countries can take to incentivize demand reduction while limiting the negative effects on society and the economy.

These include auction systems or calls for tenders to encourage industrial consumers to reduce their consumption, possibly at cross-border level.

Other measures include “interruptible contracts”a flexibility measure with pre-determined financial compensation for the reduction in gas volume during disconnection and calling on companies to use financial swap contracts to shift production to regions less exposed to shortages supply.

Prepare for disruptions

After exhausting such measures, EU Member States “may need to start partially or fully restricting certain groups of consumers” defined during the “emergency” phase of their national crisis plans.

Prioritization of sectors will likely vary from country to country, but “it is advisable to include the impact on health, food, safety and the environment, security and defense in the order of national priorities”can we read in the document.

The demand reduction plan provides guidance to governments on how to determine which sectors to focus on, taking into account four elements:

  • “Societal criticality”: the importance of the sector or product for society, particularly in terms of health, safety, environment and security.
  • “Cross-border supply chains”: the extent to which the product forms part of cross-border supply chains and would disrupt the proper delivery of essential societal services at EU level.
  • “Possibilities for substitution and reduction”: if the fossil gas can be replaced or if energy saving measures can be used.
  • “Damage to facilities”: what damage could be caused to industrial equipment in the event of a temporary shutdown and what the cost of repair would be. This applies in particular to sectors that must operate continuously, such as certain branches of the medical industry, pharmaceuticals, chemical processes, glass and steel.

One way to set priorities might be to look at the product rather than the sector. For example, not all glass production would be prioritized, but glass for food containers, vials and syringes as well as renewable infrastructure could be, the document says.

The political texts to be presented on Wednesday will make it possible to coordinate the measures taken by EU member states in the event of a large-scale gas crisis. But industry sources contacted by EURACTIV say these are just guidelines. The real test will be whether governments implement them and enforce the European single market, they warn.

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