The European regulation on security of gas supply, adopted in 2017, establishes three levels of crisis with the aim of standardize the response at a European level. The first is an early warning, in case there is reliable information about a possible deterioration in supply. The second, alert in case the deterioration in the supply at European level is confirmed or that two countries declare the situation. And, thirdly, regional or European emergency in case of urgency. At each level, member states can adopt measures to restrict, ration and ultimately cut off gas supplies when all other options fail. From this Wednesday, according to the latest draft of the Community Executive, the EU would be on pre-alert. What does this change imply and what measures does the European Commission propose to respond to the increasingly alarming situation and reduce gas consumption?
Reduce heating and cooling
The RepowerEU plan, proposed in mid-May by Brussels, already aimed at energy saving as the “fastest and cheapest” way to deal with the energy crisis through voluntary measures, simply by changing habits and behaviors. The Community Executive continues in this line – “everyone can save gas” – and is committed to saving awareness campaigns.
For example, it suggests that in the alert phase member states should introduce mandatory national reduction targets for both heating and cooling. “The higher prices have probably in part induced consumers to reduce the use of heating or air conditioning but an obligation could be necessary if the prices are not enough”, says Brussels, which puts the possible savings at 11,000 million cubic meters by changing habits in this field.
For example, savings could materialize from this summer, reducing the consumption of electricity -and indirectly of gas- with the air conditioning. During the winter season, additional savings could be achieved with the deployment of alternative heat sources for district heating, heat pumps in homes, and saving campaigns to lower the thermostat by 1º as well as reducing the heating of public buildings, offices, and commercial buildings. The plan does not mention, as in previous drafts, the 19th.
The European Commission proposes to promote the fuel substitution both in industry and in electricity generation to bet, when possible, on renewable energies or cleaner sources and less carbon intensive. The plan contemplates the possibility of using coal power plants and the temporary suspension of the legal limitations for its operation, which some member states have decided to apply. “However, these measures should always be seen as short-term temporary and reversible, so as not to create a long-term carbon lock-in, in line with the Just Transition objective of the European Green Deal,” he notes.
Furthermore, the use of other fuels could trigger polluting emissions although Brussels clarifies that a derogation from the rules is possible “under certain conditions” in case of supply needs. The plan also opens the door to postpone the closure of nuclear power plants as countries such as Belgium – Prime Minister Alexander de Croo has requested to prolong the operation of the Tihange 2 reactor until the winter peak is over – or France.
financial compensation
The plan also recommends member states to put in place auction mechanisms or tenders to compensate industries that intend to reduce their gas consumption. That is, those industries best placed to reduce their demand could volunteer for compensation.
Another possibility for industrial consumers would be to previously agree contractual changes in production to a region less exposed to supply cuts. In the event of an emergency, companies could move their production to a region less exposed to supply cuts, as long as it was compatible with the rules of competition.
Lastly, Brussels suggests what it calls “interruptible” contracts, or what is the same, predetermined financial compensation that would be granted for a level – also predetermined – of reduction in the volume of gas consumed during a given period. Although in principle they would not fit a complete Russian cut, Brussels believes that they can help save gas.
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