The European Commission is working on new measures to ensure energy security, including setting a minimum amount of gas reserves that must be accumulated by the EU member states by the start of the next heating season, Bloomberg reports.
According to the agency, the European Commission plans to propose a series of new incentives and obligations for EU members as part of an action plan for “more affordable, safer and more sustainable energy.” So, the document will fix the legal requirement that they must have a minimum level of stocks by September 30 of each year. It is reported that the document will be submitted in March, before that time it may be amended.
“In the context of the current crisis, gas storage facilities have become especially important,” Bloomberg quotes the text of the document. “However, storage can only provide energy security when it is filled to the appropriate level before the heating season.”
It is reported that the EC intends to call on the governments of the EU countries to determine the minimum levels of gas reserves for companies whose storage facilities are located on their territory, as well as to ensure sufficient national or regional capacity at the beginning of each heating season. Governments will then be able to offer companies assistance to incentivize suppliers to ensure sufficient gas supplies. The action plan may also include a commitment to launch a pilot project to help states and operators jointly purchase gas in the current year up to the minimum required level.
At the end of last summer, gas prices in Europe began to grow rapidly. If in the spring the average futures price was in the region of $250-300 per 1000 cubic meters. m, then already at the end of August it exceeded $600, and at the beginning of October – $1000. This comes against the background of historically low occupancy of European underground storage facilities and strong demand for liquefied natural gas in Asia. In December, quotes again updated their historical highs, reaching almost $2,200 per 1,000 cubic meters. m, and then began to decline. In February, quotations were in the region of $800-1000 per thousand cubic meters. In its winter forecast, the European Commission said that gas prices in Europe will remain high this year and will not noticeably decrease until 2023.
In December, the EC proposed to EU members that they refuse to extend existing long-term contracts for the supply of natural gas and conclude new agreements of this kind after 2049, as well as jointly purchase strategic gas reserves. The regulator’s proposals pave the way for the energy transition: by 2050, the EU plans to achieve climate neutrality, experts predict that natural gas consumption in Europe by this time may fall by more than 60%. However, gas is expected to continue to play an important role in the European energy sector during the transition period.