EU to boost Gas Storage Deployment for Security of Supply

On Thursday, the 21st October 2021, EU Heads of State and Government will discuss current energy prices and possible reactions at the European Council in Brussels. With regard to the meeting and looking at upcoming reforms of the EU gas and hydrogen market regulation, the Initiative Erdgasspeicher (INES) recommends enhancing the EU’s Gas-Security-of-Supply Regulation.

Heads of State and Government will define which national and European measures to take in order to address current energy price peaks. The debate happens against the background of a soon-to-be-presented revision of EU rules for the gas and hydrogen economy. The Commission will present the according legislative proposals on December 14, 2021. A revision of the Gas-Security-of-Supply Regulation is also part of the Commission’s plan. Far-reaching market intrusions have been proposed already, among them a European purchasing union or the development of state gas reserves.

Looking at the revision of the Gas-Security-of-Supply Regulation, INES recommends to legally require the deployment of gas storage facilities to comply with the so-called supply standard. A practical implementation would be a levy-based balancing energy reserve in storage facilities. A similar reserve is currently realized in Germany to secure gas networks using so-called Long-Term-Options (LTOs). A levy-based balancing energy reserve brings additional costs for German households with a standardized gas demand of 20,000 kilowatt hours of only one Euro.

Sebastian Bleschke, Management Director at INES, explains the association’s proposal: “The European Council will debate the current energy price situation and thereby evaluate which reform path for the Gas-Security-of-Supply Regulation will allow for a better usage of gas storage facilities. We recommend to legally require deploying gas storage to fulfill supply standard rules. Effectively, this establishes a form of liability protection that would be legally required for every gas supplier. Our proposal is effective and efficient as it can be implemented centrally by Market Area Coordinators. These would act as the insurer for all suppliers in their market area and ensure gas demands of protected customers according to the supply standard.”

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