Gas Europe prepares for the worst Les Echos

Gas: Europe prepares for the worst Les Echos

Posted on Jul 20, 2022 at 8:43 am. Updated July 20, 2022 at 4:49 p.m.

Faced with the risk of gas shortages, every member country of the European Union (EU) will have to make more efforts than expected. This Wednesday, the European Commission proposed that each of them should do “everything possible” to reduce their national gas consumption by at least 15% between August 2022 and March 2023 compared to the average of the last five years in the same period. as part of a contingency plan while Europe is undoubtedly going through its worst energy crisis.

“Now we have to reduce our energy consumption to avoid a recession in our internal market,” warned European Commission President Ursula von der Leyen, who wants Europe to be prepared to suffer even the worst-case scenario, where Russia shuts off gas to Europe. This could potentially reduce Europe’s gross domestic product by 1.5% if the winter is cold, the Commission estimates.

For the time being, everyone must therefore, on a voluntary basis, encourage households and businesses to join efforts to allow Europeans to spend the winter in warmth and businesses not to go broke in the coming months.

The plan is due to be discussed at a council of European energy ministers on Tuesday 26 July. “I expect all Member States to tell me that they have already made great efforts, but in reality there is only a 5% reduction in energy consumption in Europe today, that is insufficient,” said Energy Commissioner Kadri Simson.

Solidarity under conditions

In any case, Europe intends to closely monitor the efforts of each Member State, which asks to send a list of the measures taken every two months. The community board recommends both reducing heating and air conditioning, going green where possible, switching to other energy sources where necessary.

The State Aid Temporary Framework, put in place at the start of the Ukraine crisis, will also be updated to encourage any possible substitutions. If member states act to meet demand reduction targets, “Putin’s attempt to manipulate us will fail,” said EU climate chief Frans Timmermans.

Above all, Europe is committed to solidarity between the member states so that they can appeal to one another in the event of difficulties. But she has conditions. “Those asking for solidarity must show that they have taken all necessary measures to reduce demand for Russian gas,” said Thierry Breton, the Internal Market Commissioner. For Germany, for example, this is further pressure to expand its nuclear power plants.

Certain sectors that are deemed non-essential could be targeted directly for reducing energy consumption, but that decision is up to Member States. However, the Commission takes it for granted that the health, food, defense or refinery sectors cannot be affected.

forced rationing

The Commission wants to act quickly. While the 15% target is currently voluntary, it is intended to become mandatory in the event of a serious shortage or if at least three member states request it. However, many European countries are reluctant to do so as they have already put their own contingency plans in place. Poland, which is facing coal shortages, has already officially signaled its opposition.

Hungary, for its part, banned gas from leaving its borders from August, sparking EU ire. Twelve member states have been hit by cuts in Russian gas supplies, including Germany, which last month raised its gas risk warning to the second-highest level.

Europe has little hope that Russia will resume full supplies thanks to Nord Stream, the EU’s main gas vein, which has been officially closed for repairs since earlier this month. “If we start now, I think that everything is in place so that we can completely do without Russian gas next winter,” said Thierry Breton. We’re at 66 billion cubic meters of LNG and 11 billion in existing pipelines. The European Commission has indicated that it wants to cut Russian gas imports by 100 billion cubic meters by 2022.