EU clears French support for gas storage
The European Commission has ruled that France's system for financially supporting the operation of natural gas storage facilities is needed for the country's energy security and does not violate EU state aid rules, it said on June 28.
The system, introduced in 2017, involves auctioning off storage capacities and covering operators' cost. When operators' revenues fall below a threshold set by France's independent energy regulatory authority, they receive compensation, financed through network tariffs. On the other hand, they pay back any surplus revenues above the threshold.
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The EC launched an investigation of the practice in February 2020, over doubts about whether the system was justified, and if its benefits outweighed the possible cost to competition and trade between member states. The EU executive "concluded that the regulatory mechanism for the storage of natural gas in France complied with EU rules on state aid. In particular, the measure is necessary and proportionate to ensure the security of energy supply to its citizens and businesses, while also guaranteeing that any possible distortions of competition are minimised," the commission's executive vice president Margrethe Vestager said.
The system does not cause distortion between French gas suppliers and their counterparts in other member states, or between storage operators in France and elsewhere, the EC said. Distortion between storage operators from other member states is limited by the significant level of subscription rates, based on long-term contracts, it said.
There are currently three storage operators in France: Storengy, Geomethane and Terega.