- The plan will include consumption reduction targets for all member states, which will be voluntary as of this summer, but may become mandatory if the crisis worsens.
- In addition, the plan will include a mechanism to make this target binding if the voluntary measures are not sufficient and the situation requires it.
- The Community Executive also plans to urge governments to provide incentives through State aid for the substitution of normal fuels with biomass of sustainable origin or biomethane from waste.
The Plan, therefore, proposes a voluntary gas demand reduction target of 15% from 1 August 2022 to 31 March 2023. To reach that target, it outlines various measures whereby Member States can encourage the decrease of gas demand and consumption by the public sector, businesses, as well as households. By the end of September, Member States are required to update their existing national emergency plans with their planned demand-reduction measures to meet this target. The Annex on demand reduction details policy measures available to incentivise fuel switching and the decrease of gas consumption. It also puts forward criteria for Member States to identify critical non-protected consumers should curtailment be necessary.
In addition, the plan is underpinned by a legislative proposal introducing a new EU emergency tool to address a potential gap between supply and demand in the European gas market. The proposed Regulation, based on Article 122 of the EU Treaty, introduces a process to declare, after consulting the Council, an EU alert if voluntary demand-reduction targets are not sufficient to prevent this gap. In case of such a situation, the Commission is empowered to activate a binding demand reduction target.
Brussels will also propose the creation of auction or bidding systems through which governments would encourage large industrial consumers to reduce their gas consumption in exchange for financial compensation or additional savings.
As part of its contingency plan, the European Commission will call for a reduction in the energy consumption of buildings and households, such that it will propose reducing the thermostat temperature by one degree or using less hot water.
“We are working on all possible scenarios and one of those scenarios, which the contingency plan envisages, is the possibility that flows may not be restored,” European Commission chief spokesman Eric Mamer told reporters on Tuesday, asked about possible Gazprom supply cuts.
Russia’s state-owned gas company Gazprom warned its customers this week in a letter that it cannot guarantee gas supplies due to “extraordinary” circumstances, and invoked the force majeure clause that allows a company to exempt itself from its contractual obligations.
Last week, the Russian gas export giant interrupted supplies, citing maintenance work on the Nord Stream 1 pipeline, which connects Germany to Russia via the Baltic Sea and is the most important link for the flow of gas to central Europe.
According to the Russian company, the gas will stop flowing until July 21, although officials had already expressed their concern about the possibility that the supply might not be restored, after Gazprom has been reducing the flow of gas to Europe on several occasions over the last year.
Faced with this scenario, the European Commission has indicated that it is preparing for all possible scenarios, especially the most negative ones, which would be linked to the Russian state-owned company not resuming the flow of gas as of Thursday.
The President of the European Commission, Ursula von der Leyen, announced after the last EU Council of State and Government leaders at the end of June that Brussels would present an emergency plan to ensure that the EU is prepared for additional cuts in gas supplies from Moscow, which before the start of the conflict in Ukraine accounted for 40% of gas imports to the EU market, according to Eurostat data.
Already then Von der Leyen launched a message urging consumers to raise two degrees air conditioning in summer and lower two degrees heating in winter. A message of restriction of energy consumption that everything seems to be embodied in the emergency plan presented by the Community Executive.
This plan at European level will be combined with the emergency plans at national level to ensure the security of gas supply, which include national and common risks and propose measures for these eventualities, taking into account the specific circumstances of each European country.
The national preventive and emergency plans are updated every four years and include regional chapters reflecting common risks. In fact, in 2022 four Member States have updated their emergency plans to respond to the geopolitical situation: Belgium, Denmark, Sweden and Romania and twelve other Member States last did so in 2019.
The EU executive presented last May the Repower EU plan, which sets out a roadmap to completely cut fossil fuel imports from Russia by 2030 and proposes to diversify energy supply, boost renewables as well as hydrogen and energy efficiency technologies.
Source: Renewable Energies (2022)