Eurelectric views on EC Proposed measures to safeguard the security of gas supply

Position paper/report Download PDF

KEY MESSAGES

  • Setting a minimum filling level in EU gas storages would strengthen security of supply, ahead of winter 22/23 and help to cope with any potential disruption of Russian gas supply across Europe.
  • Such an approach, if not set on a temporary basis, if not coordinated at EU level and if accompanied by inappropriate non-market based rules, could however lead to a situation of overcapacity in the long-run and its impact on the market should therefore be carefully assessed (e.g. risk of distortions of the flexibility market if implemented through storage obligation in Europe).
    • It is necessary to closely monitor the situation and assess whether a general storage target continues to be proportionate to the objective pursued in the long-term. The Regulation should therefore define the objectives of SoS (the supply gas standard).
    • Joint purchasing of LNG by member states will fundamentally distort the single gas market and will be far less efficient than relying on market participants to do this as it has been in force for 20 years as part of the EU competing energy markets.
    • To define the long-term strategy for gas storage, we encourage the EC to assess different approaches and consider the experience of Member States which had a high filling rate at the beginning of the winter. (e.g. For example, in France, storage levels are filled at 94% with a market-based approach, auctions and proper incentives for example)
    • To improve the security of supply, other measures could be envisaged such as the implementation of demand response scheme to be encouraged through financial incentives.
  • The filling target should be determined by means of a robust cost-benefit analysis (CBA) and in a transparent manner as soon as possible. In the amendments proposed to Regulation 2017/1938, it is key to incorporate to Art 6a provisions regarding the principles to be complied with by the Delegated Act, including the development of a robust and transparent CBA methodology.
  • Setting 1st November as the reference filling target date looks relevant, as it corresponds to the entry of the heating season for most of Member-States (1st December would be too late and a far more stringent constraint). Storage intervention at this scale may be necessary due to the systemic crisis circumstances.
  • The proposed burden sharing principle looks appropriate but would deserve being described more in details by the EC to understand better potential constraints linked with its implementation.

Download PDF