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New Energy World
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EC proposes gas demand reduction plan as Nord Stream comes back online and UK looks to reopen Rough
27/7/2022
The European Commission (EC) proposed a new legislative tool and a gas demand reduction plan last week in a bid to reduce both the risk and the costs for Europe in case of further or full disruption of gas supplies, strengthening European energy resilience.
The plan proposes to reduce gas use in Europe by 15% until next spring. Noting that almost half of the European Union’s (EU) member states have already been affected by reduced deliveries, EC President Ursula von der Leyen said: ‘We have to be proactive. We have to prepare for a potential full disruption of Russian gas – and this is a likely scenario.’
The EC is calling for all consumers, public administrations, households, owners of public buildings, power suppliers and industry to ‘take measures to save gas’, while it also strives to accelerate work on supply diversification, including the joint purchasing of gas to strengthen the EU’s possibility of sourcing alternative gas deliveries.
The 15% target would initially be voluntary but could later be made compulsory in the event of an EU-wide energy emergency.
France, Germany, Ireland, Poland, and the Netherlands immediately voiced concerns over the targets and the EC’s ability to order mandatory cuts without a vote, whilst Spain and Portugal rejected the proposal outright.
The EC subsequently watered down its proposal, with The Guardian reporting as New Energy World went to press that all member countries except Hungary were to support the voluntary cut, but with opt-outs for island nations and possible exclusions for countries with little connection to Europe’s gas network.
Nord Stream back online, but at reduced capacity
The EC proposal came as the Nord Stream 1 pipeline linking Russia to Germany came back online after a 10-day break for maintenance. However, supply concerns remained as the reported flow was just 40% of the pipeline’s 55bn m3/y capacity.
Gazprom later announced that volumes would fall to just 20% of the pipeline’s capacity from 27 July in order to carry out maintenance work on a second gas turbine.
Prior to the war in Ukraine, the EU received 40% of its gas from Russia. The EU has accused Russia of ‘energy blackmail’, while the Kremlin maintains the Nord Stream supply interruptions are the result of maintenance issues and western sanctions.
Building supply resilience
The EC has been working hard to end the EU’s dependence on Russian fossil fuels as soon as possible following Russia’s invasion of Ukraine. Its REPowerEU plan sets out measures on diversification of energy suppliers, energy savings and energy efficiency. Over 20% of the EU’s energy currently comes from renewables, and the EC has proposed to more than double this to at least 45% by 2030. Since the beginning of the year an estimated additional 20 GW of renewable energy capacity has been added, equivalent to more than 4bn m3 of natural gas.
It has also been investing in LNG terminals and gas interconnectors, and reports that ‘every member state can now receive gas supplies from at least two sources, and reverse flows are possible between neighbours’.
The EU has also adopted new legislation requiring EU underground gas storage to be filled to 80% of capacity by 1 November 2022 to ensure supply for the coming winter. However, Europe’s gas filling level is currently just under 65%, and Energy Commissioner Kadri Simson has warned that ‘Russian gas cut-offs could jeopardise the EU’s chances of reaching [this target]’.
Meanwhile, the UK’s biggest natural gas storage site – Rough, which closed in 2017 – is a step closer to reopening after the North Sea Transition Authority (NSTA) gave Centrica the initial go-ahead by awarding it a gas storage licence. There are hopes the facility could be reopened as soon as this autumn. However, the UK government is reportedly still in talks with Centrica about possible financial assistance, which could lead to a further levy being added to consumer bills, worsening the cost-of-living crisis.
