EU aims to double gas storage reserve by next winter: press
The EU is looking to introduce subsidies in order to double the size of its gas storage reserve by new winter, the Financial Times reported on March 3.
The bloc began the passing winter heating season with record low amounts of gas in storage, and stocks have fallen to under 29% as of March 4, according to Gas Infrastructure Europe (GIE). That is down from about 53% at the end of December.
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Now Brussels is looking to introducing financial aids to ramp up stored gas to 80% capacity by September 30. EU commissioners could adopt a paper on the proposals early next week, the FT said.
The EU can store around 117bn m3 metres of natural gas from 146 underground storage facilities across Europe, principally in Germany, where 60 gas storage sites are located, according to GIE.
The new proposals include removing transmission fees for stored gas, expanding on the existing 50% rebate, and a recommendation that the state make payments to companies. Minimum price guarantees or other subsidies to the effect that suppliers are compensated when gas prices decrease could also be implemented.
The new storage target could become an annual requirement for EU energy policy. Speaking to the European parliament on March 3, energy commissioner Kadri Simson stressed it had become "painfully clear" that the EU must avoid giving a third country the power to destabilise European energy markets. However the paper suggests a short-term charge on energy firms until June 30 could help cushion customers in the event of further price rises.
European reliance on Russian gas is coming under greater scrutiny in light of the war in Ukraine, and after a reported 170% rise in prices across the continent in 2021. The bloc sources around 39% of consumption from Russian suppliers at present, the FT said.
The policy paper calls for planning processes tot be sped up as well as more investment as part of a co-ordinated EU action plan to reduce Russian gas dependence. In addition to storage, Brussels is also looking to bolster energy resiliency using its emissions trading system (ETS), in order to spur renewable energy investments. Revenue from the ETS amounted to €30bn in 2021, which could be reinvested in new renewable projects. However, the policy encountered a set back last year with one-quarter of new solar development suffering delays due to material and transport costs.
The EU also aims to boost supplies of LNG and could provide subsidies to encourage farms to build biogas plants. Another part of the plan is the development of low-carbon hydrogen through infrastructure and production facilities.