EUROPE
Brussels lays out EU gas crisis plan ahead of coming winter

The European Commission proposed on Wednesday (20 July) introducing a new target for EU countries to temporarily reduce by 15% their gas consumption, with the possibility of the goal becoming legally binding in case of emergency.

“We have to be proactive. We have to prepare for a potential full disruption of Russian gas – and this is a likely scenario,” said European Commission President Ursula von der Leyen.

To mitigate this disruption, the EU has tabled a communication for EU member states, titled “save energy for a safe winter” and outlining energy demand reduction measures.

The plan proposes a voluntary gas demand reduction target of 15%, from 1 August 2022 to 31 March 2023. This would become binding if the situation deteriorates and, by the end of September, EU countries should have updated their national emergency plans with measures to meet the objective.

Currently, Europe’s gas filling level is just under 65%, according to energy commissioner Kadri Simson, but she warned that Russian gas cut-offs could jeopardise the EU’s chances of reaching its 80% storage goal by November.

“If our demand reduction target is not ambitious enough, we risk ending this winter with empty storage, which would be impossible to refill in time for the next heating season,” she said, adding that the 15% reduction target “will significantly reduce security risks”.

Reduction and curtailment plans

According to the EU executive, “energy saved in summer is energy available for winter.” The measures it suggests echo those from the International Energy Agency (IEA) and include steps such as setting air conditioning systems to a higher temperature in the summer.

When the heating season starts in October, national governments can also save gas by asking households to lower their thermostat by 1°C – and mandating reduced heating of public buildings, offices, and commercial buildings.

In case of a severe gas shortage, industry will be cut off first, although essential services, like electricity production, are likely to be prioritised and preserved.

Private households and essential social services, like schools and hospitals, would be the last to be curtailed because they are “protected customers” under EU law.

“Households are protected consumers and there should be no risk of anyone being cut off. Heating, [for] the gas-supplied homes is safeguarded, but everyone can and should save gas and we will continue to promote the ideas set out in the EU energy saving plan and ask all member states to launch awareness campaigns to encourage gas and behaviour,” said Simson.

To avoid the need for curtailments, gas consumption can also be reduced using market-based measures, such as auctions or tenders for industrial consumers to offer compensation in return for demand reduction.

For example, French retailer groups Auchan, E.Leclerc, Carrefour and others committed on Monday to curb their electricity use in case of demand peak by turning off lights after closure and dimming lighting at their warehouses and retail stores.

Meanwhile, the European Commission is also advocating for countries to switch more quickly to renewables and use other energy sources for power production, including coal in the short term.

But fuel switching measures should be designed in a way that does not compromise the EU’s decarbonisation objectives for 2030. According to the European Commission, switching to coal, oil or nuclear is a temporary measure “as long as it avoids long term carbon lock-in”.

While the Commission prioritises the role of renewables, there are concerns the plan could knock Europe off track in meeting its climate objectives.

According to Adeline Rochet from the environmental think tank E3G, “In the effort to hurry for gas cuts, we end up slowing down the transition as a whole.”

“These quick fixes are below insufficient for households, who are mostly left with information campaigns. There are no measures to cushion the social impacts of high risks of increased energy poverty, no plans for accelerating renovation or overcoming supply chains bottlenecks, etc,” she added.

However, others are more supportive. The European Commission’s plan goes in the right direction, according to Simone Tagliapietra, a senior fellow at the think tank Bruegel, but he added that it requires serious and straightforward communication to the public.

“Moreover, countries need to ensure that all consumers have good incentives to reduce consumption. European leaders should agree to stop directly subsidising energy consumption and instead subsidise energy reduction,” he added.

“Regulatory tools such as speed limits or changing minimum temperature rules for buildings need to be on the table. Politically unlocking yet untapped energy demand reduction potential in Europe will substantially alleviate energy market pressures,” he continued.

Solidarity is key

To prepare for potentially severe disruptions this winter, EU coordination and solidarity will also be essential, said von der Leyen. The EU’s 2017 security of supply regulation requires EU countries “to put in place the necessary technical, legal and financial arrangements to make the provision of solidarity gas possible in practice”.

Yet, only six bilateral gas solidarity agreements have been signed between EU countries so far, the Commission indicated, adding that bilateral agreements are meant to provide gas to the legally protected customers of neighbouring countries in case of crisis.

“There are some member states that are more directly exposed than others to Russian gas and they are of course more vulnerable than others to risk disruption but all member states will suffer the consequences of such a disruption through the single market,” said von der Leyen.

“This is why it is important that all member states now contribute in the saving, the storing and are ready to share gas with the other neighbours in case of energy solidarity,” she added.

Source: Euractiv.com

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