crescent yellow
The union’s crisis management commissioner announced the plan, where members will share electricity and strategic reserves will also be used. However, Germany said it may have to limit its electricity exports to neighbors such as France and Austria as a ‘last resort’. In the UK, there may be a gas emergency.
After the Ukraine War, preparations for the dark winter began in European countries, which were trying to become independent of Russia’s energy resources. While the damage in Nord Stream 1 is permanent and Nord Stream 2 can be repaired quickly, Germany still needs to approve the license, which it canceled with a political decision at a time when geopolitical tensions are escalating. The European Commission, on the other hand, is preparing contingency plans that include power outages.
There are two scenarios, both based on members sharing electricity
In the first of the two scenarios in which the Commission has prepared, only a small number of EU member states are affected by the power outage and other members are able to supply electricity to the affected members. In the second scenario conveyed by EU Crisis Management Commissioner Janez Lenarcic, speaking to the RND media group, “In case many member states are affected at the same time, the union countries will have to share their emergency aid shipments with other members and the Commission will meet their needs from strategic reserves.”
of the European Commission energy There are also problems in reaching the target of reducing demand by 10-15 percent in order to ensure safety. Klaus Muller, the official responsible for monitoring the natural gas network in Germany, states that the natural gas demand of German households and SMEs increased by 14.5 percent compared to the average of the last five years, according to the news in Bloomberg, and says the data is “very striking”. . Muller also emphasizes the need to save natural gas even though the air temperatures are below average.
“There may also be a need for a disaster support program”
EU Crisis Management Commissioner Lenarcic said in his statements that it is possible that there will be a need for a disaster support program within the EU. The EU’s crisis management unit announced in April that it had started a stockpiling operation to strengthen its defense against chemical, nuclear and biological incidents after Russia’s invasion of Ukraine.
The damage is not permanent in Nord Stream 2 but needs a step back
West continues to blame Russia and Russia on the USA for sabotage, but it has not yet been determined who carried out the attacks that caused heavy damage in Nord Stream 1 and 2. However, in the statement made by Gazprom, Russia’s natural gas company, the signal came that Nord Stream 2 may not have been damaged despite the attack, and that Germany would have to revert from the decision taken in February to ensure gas flow through this pipeline. After the US sanctions on the companies involved in the project and pressure from different European countries, Germany pulled Nord Stream 2 to the skid without any shipment and did not give approval. In addition, the EU’s approval is required for the flow to take place over this line.
“Streams from Ukraine will probably also stop”
Senior executives at Europe’s three largest energy trading companies consider it likely that Russia will also cut off gas flows through Ukraine. “Markets are already anticipating that it’s only a matter of time before gas flows to Europe via Ukraine stop,” said Torbjorn Tornqvist, CEO of Gunvor Group, at the Energy Intelligence Forum in London. Russel Hardy, CEO of Vitol Group, pointed out that the natural gas markets are in a ‘very stressful’ state and warned that “Prices will remain high ‘for a little longer’ and this will have an impact on industry demand.”
“We are more worried about next winter”
Ben Luckock, Co-Chair of Trafigura Group oil trade, said: “The European benchmark gas TTF prices will continue to remain high. “The drop in demand may mean we can avoid a disaster this winter, but we’re more worried about next winter.” As of Tuesday, TTF has increased by 137 percent since the beginning of the year and EuroIt is trading at /MWh, but the indicator rose to 340 Euros in March and August.
Germany may cut electricity exports as a last resort
Ampiron’s CTO, the largest of Germany’s four largest electricity grid operators, said it could have to cut electricity exports to other countries like France and Austria during the winter months as a “last resort” to avoid blackouts and bottlenecks. Hendrik Neuman added that in such a scenario, hours rather than days are at stake. Neumann also in Germany Economy He states that he did not agree with Minister Robert Habeck’s statement in July that ‘the country is not facing an electricity problem’ and said, “If there was no problem, we would not have been asked by the government to make a special analysis on the electricity market in winter.” The 200 billion Euro ‘protection shield’ announced by Berlin last week to protect German companies and consumers angered some EU members, especially Hungary, and Italy’s outgoing Prime Minister Mario Draghi said: We cannot be divided,” he said. Germany, which has been a net exporter in electricity for years, restricting exports to its biggest buyers such as France and Austria as a ‘last resort’ may worsen the energy bottleneck in these countries and damage the EU’s ‘unity’ stance against Russia. Germany exported 17,400 GWh of electricity last year, and 18,500 GWh in 2020. The biggest buyers were France and Austria. Germany’s electricity prices will continue to rise through 2023, according to an analysis by Bloomberg BNEF. According to BNEF’s forecasts, electricity prices will peak at 275 Euro/Mwh in 2023 and the most important factor in the rise will be the increase in natural gas prices.
Britain’s energy regulator also warns: Gas supply may be in an emergency
Britain’s energy regulator Ofgem also warned that the country faces a ‘gas supply emergency’ this winter, possibly as Russia cuts gas flows to Europe. “There is a huge risk of a gas bottleneck this winter due to the war in Ukraine and the shortage of natural gas in Europe,” the warning was issued in response to a request for an amendment to a rule by the energy company SEE, whose shares are traded on the London Stock Exchange, which imposes heavy penalties on natural gas-fired power plants. As a result, the UK may have to go into an emergency in natural gas supply,” the statement said.