Next week, he will present a document in which he considers solidarity, price limits and difficult decisions inevitable in a worst-case scenario.
If in the coming weeks, or even months ahead, Russia continues to reduce gas shipments to its European buyers, and prices rise, but not by much, the EU will have to tighten its belt, with reserves. And solidarity will have to be relied upon and continue to bet on alternative sources. or new suppliers. But if Moscow shuts down completely, there will be few alternatives to enforced rationing, a sharp drop in demand and even a blanket cap across the continent. This is the conclusion of the document that runs these days The European Commission.
Initiatives of the Commission under the name, RepowerEUThe paper seeks to address the essential lack of reliance on fossil fuels, “joining forces to accelerate the clean transition and achieve a more resilient power system and a true energy union,” says the paper. extended the afternoon context. The moment could not be more delicate. The European Union tries to execute a Sixth Sanctions Package Which would impose sanctions on imports of Russian oil before the end of the year (with a slightly higher margin for the most dependent countries). And Russia is responding to sanctions against European firms as well. This Thursday it announced the cutting of the Yamal gas pipeline, which reaches Germany via Poland, and announced a punishment for the companies: Europol Gaz, That pushed futures prices up 13% intraday, to 106 euros per megawatt hour, more than four times the price a year ago.
Brussels analysis comes as no surprise, If Russia cuts shipments altogether, the impact would be brutal for Europe and its economy with no choice but to increase savings measures and assume rationing. Brussels emphasizes savings, which can reduce gas and oil purchases by up to 5% each year. And he reiterates that if the ideas contained in the green transition and energy efficiency plans are implemented, the reduction could increase to 30% in 2030. That is why he calls for a review of the directive to raise the required efficiency limit from 9%. 13%.%.
But the bulk of the conversation will focus on potential range, consumption and price. “To deal with this situation, the EU already has national emergency plans developed under the Protection of Supply Regulation. The Commission urges Member States to update their contingency plans in view of the updated preparedness summary, including Considering the recommendations, although the risk of unsatisfied gas demand for this summer is limited, additional measures are needed should storage not be sufficient,” says the paper, which recalls the importance of accumulating for the coming winter. does.
Brussels puts an unavoidable scenario on the table when the tap is turned off. “These updated plans should be complemented by the establishment of coordinated rationing and demand reduction based on general EU principles during an EU-wide emergency,” it read. “Based on the principle of solidarity, a reduction in gas demand in the least affected member states should be considered to the benefit of the most affected member states, even if such rationing is not provided for in the national emergency plan.” National emergency plans would include market-based measures to reduce companies’ energy consumption (voluntary reduction), for example, disrupting contracts whereby companies agree to stop their consumption in exchange for more remunerative prices in normal times. “Add paper.
in the hands of governments
The European Commission has the legislative initiative and puts ideas on the table, but decisions are ultimately made by national governments. So far there has been solidarity, especially after cut in Poland and Bulgaria by Russia, but it will be something massive and when the pressure is at its maximum. “A coordinated European plan for downsizing industry would reduce the overall impact of emergency measures on the European economy in the event of large-scale disruption with cross-border effects. Such a plan should take into account the important role of industries that Whether they deal with European and global food, health and safety, the impact on supply chains across borders, for industry to switch to alternative supplies or reduce its consumption, and the impact on the competitiveness of various sectors.
Brussels admits a price cap, advanced by Expansion of, should be part of the discussion. Some are temporary, at the continental level, only in times of emergency, but to a maximum extent. There are neither figures in the proposal nor are they expected. It is up to the commission to declare a state of emergency in very specific cases, but such a drastic initiative now requires a complex consent. When Spain and Portugal asked for “Iberian Exceptionalism” The discussion was intense and will continue to be so. Energy ministers will meet soon and at the end of the month there will be a European Council consisting of heads of state and government.
These are just contingency plans, Discussions about how to be prepared for the worst case scenario. There is some peace in the coming months, but even in a good scenario, autumn and winter are going to be very difficult, which is not the main one right now. Brussels recognizes that it will be necessary to act “at different levels of the gas value chain” and, as is also the case with the Spanish system, “unless it is accompanied by significant reductions in consumption”, it needs to be “significant”. funding” by the states or the EU itself. Various options and tools are being considered, but there is still no roadmap for that extreme case.
The continent is in doubt. This is not the first time, far from it. And some states, the most vulnerable, have a recurring fear: what if the EU tries to put a ceiling on prices when it runs out of one of its main suppliers. Such a close would push the price up in the short run, and the demand would remain the same. So the danger of running out of gas in the market is real. Even though 27 have negotiated by hand, something that has not been done so far, despite the fact that Spain or Italy have requested it since last summer.
according to the norms of