The primary solution is to reduce demand and the European Union has agreed a target to reduce gas demand by 15% from August 2022 to March 2023. The European Commission is proposing a European Gas Demand Reduction Plan and a new legal instrument fit for that purpose. Here's what. The other derogations have to be examined case-by-case by the Commission, who will then issue an opinion with comments. No individual veto will be allowed. 0000009728 00000 n 0000009456 00000 n endstream endobj 50 0 obj <>/Metadata 33 0 R/OpenAction 51 0 R/Outlines 27 0 R/PageLayout/SinglePage/Pages 32 0 R/StructTreeRoot 35 0 R/Type/Catalog/ViewerPreferences<>>> endobj 51 0 obj <> endobj 52 0 obj >/PageTransformationMatrixList<0[1.0 0.0 0.0 1.0 -297.638 -420.945]>>/PageUIDList<0 6866>>/PageWidthList<0 595.276>>>>>>/Resources<>/ExtGState<>/Font<>/ProcSet[/PDF/Text/ImageC]/XObject<>>>/Rotate 0/StructParents 0/Tabs/S/Thumb 29 0 R/TrimBox[0.0 0.0 595.276 841.89]/Type/Page>> endobj 53 0 obj <> endobj 54 0 obj <> endobj 55 0 obj [/ICCBased 65 0 R] endobj 56 0 obj <> endobj 57 0 obj <> endobj 58 0 obj <>stream 0000126460 00000 n 0000016590 00000 n It's unclear how far member states will be willing to go under a voluntary scheme, but unpredictable and soaring energy prices may act as a motivator. Georg Zachmann, European Union countries bracing for further cuts in Russian gas supplies approved an emergency plan to curb demand, after striking compromise deals to limit . Coordinated action is needed now, with efforts by all Member States to reduce gas demand. Countries will have to decide which factories and services they allow to keep running and which ones they shut down. Whereas all member states will deploy their best efforts to meet the reductions, the Council specified some exemptions and possibilities to apply a partial or in some cases a full derogation from the mandatory reduction target, in order to reflect the particular situations of member states and to ensure that the gas reductions are effective in increasing security of supply in the EU. 0000067223 00000 n | >(>(>89999999999998P*~9n1Yr LNd. i5 European gas demand curtailment would have major adverse impacts for the industrial sector, particularly the refining, chemicals, plastic, glass, ceramic, and metal industries. To increase the EU's security of energy supply, the Council today adopted a regulation on a voluntary reduction of natural gas demand by 15% this winter. With your permission, we will use AT internet and Hotjar cookies to produce aggregated, anonymous data about our visitors' browsing and behaviour on our website. We would like to hear your views on this material or activity. Results from a simulation of a 15% reduction in gas consumption based on supply multipliers show the projected curtailment of output from this supply side shock. Other topics of interest include tools for stimulating industrial decarbonisation and the implications for new economic geography from the advent of new energy systems, particularly from hydrogen. This regulation follows other initiatives already in progress to improve the EUs resilience and security of gas supply including a gas storage regulation, the creation of an EU Energy Platform for joint purchases and initiatives listed in the REPowerEU plan. Demand in August 2022 was 23% down. They arephysically disconnected from the EU so gas savings would not benefit other states. Figure A1 shows how they correlated with actual Eurostat demand. After this, the EU Council will be able to trigger the Union alert through a qualified majority vote (55% of member statesrepresenting at least 65% of the EU population). Consequently, users may experience instabilities and limited functionality. Version: 1.0.12 Last modified: Thu Oct 20 2022 03:07:20 GMT-0700 (Pacific Daylight Time) The regulation foresees the possibility for the Council to trigger a Union alert on security of supply, in which case the gas demand reduction would become mandatory. BRUEGEL. 0000002010 00000 n Georg Zachmann, Please send any comments or requests to Ben McWilliams (, High and volatile European energy prices are being driven by extraordinarily tight supply-demand balances in energy markets, particularly for natural gas. 0000001236 00000 n Below is a description of the methodology for reporting which table A1 summarises. The European Commission released today, 20 July 2022, a new legislative tool and a European Gas Demand Reduction Plan, to reduce gas use in Europe by 15% until next spring. The EU would suffer a shortage of up to 45 billion cubic metres (bcm) of gas, which represents 15% of what member states consume on average between August and March. Member states whose electricity grids are not synchronised with the European electricity system and are more reliant on gas for electricity production will also be exempted in case they are desynchronised from a third countrys grid, in order to avoid the risk of an electricity supply crisis. Ben McWilliams and Because there isnt a timely and comprehensive data source covering all of the EU, this dataset is built by compiling data from a range of sources. that is not used in the summer, is gas that can be put into storage for the winter. The primary solution is to reduce demand and the European Union has agreed a target to, Demand data is compiled from a variety of sources. The exemption will only enter into force if Russia retaliates. The European Commission is drafting plans to help EU countries reduce fossil gas demand and, if necessary, curtail consumption in the face of "a likely deterioration of gas supply outlook . Factsheet - A European Gas Demand Reduction Plan Factsheet-Supporting cities to save energy Print friendly pdf EU "Save Gas for a Safe Winter" Plan English (52.534 kB - PDF) Download Press contact Tim McPHIE Phone + 32 2 295 86 02 Mail tim.mcphie@ec.europa.eu Giulia BEDINI Phone +32 2 295 86 61 Mail Giulia.BEDINI@ec.europa.eu Ana CRESPO PARRONDO Special attention will also be paid to factories whose installations can be permanently damaged if they ever stop running, like glass, steel, ceramics, textiles and pharmaceutics, and those that use gas molecules directly in their production processes, like fertilisers and chemicals. A technical annex explains this methodology. French data is from GRTGaz and ENSTOG. The dreaded scenario has gone from remote to possible in a matter of weeks. We will use this data to improve your experience on our website. It is also used for electricity production to varying degrees. The case proves how extremely sensitive energy has become for capitals, which are under enormous pressure from citizens to bring soaring bills under control. Nevertheless, only one exemption that for insular countries is automatic. It complements existing EU initiatives and legislation, which ensure that citizens can benefit from secure gas supplies and that customers are protected against major supply disruptions, notably Regulation (EU) 2017/1938 on the security of gas supply. Related Posts. 0000064106 00000 n Sq G2`!`ZT6 O!|&j% (@ ~9w Demand data is compiled from a variety of sources. 0000046330 00000 n . 0000010547 00000 n The European Gas Demand Reduction Plan is based on three pillars of action, which the Commission recommends to Member States: switching from gas to alternative fuels to minimise industry curtailment; incentivising consumption reduction from industries with market tools; and saving on heating and cooling. The regulation will now be published in the Official Journal and enter into force on the next day. Spanish data is taken from Enagas. 49 47 The European Union is preparing for a worst-case scenario this winter, accusing Russia of potentially weaponising energy. %%EOF 0000001607 00000 n In the case of a normal winter, the gap would be 30 bcm of gas equal to a 10% reduction. The Commission argues that, if member states take pre-emptive action and begin saving gas before Russia turns off the taps, the disruption will be managed and the economic shock will be contained. 0000058034 00000 n trailer 0000013161 00000 n 0000206535 00000 n 0000008786 00000 n 0000215712 00000 n Energy ministers reach deal on EU-wide 15% gas reduction plan, Energy savings: How EU governments plan to cut their consumption. The EU Commission proposes a European Gas Demand Reduction Plan, to reduce gas use in Europe by 15% until next spring. For Germany, data is taken from Ember. In an effort to increase EU security of energy supply, member states today reached a political agreement on a voluntary reduction of natural gas demand by 15% this winter. Yes. All countries are taken individually apart from Denmark and Sweden which comprise a joint balancing zone. In principle, any member state could benefit from this provision, but EU officials say its impact will be limited because only a few industrial sectors, like fertilisers, use gas as feedstock. If you are not a journalist, please send your request to the public information service. Experts at the Bruegel think tankestimatethat Bulgaria, Greece, Poland and Slovakia will fall in this category. For the remaining countries (Austria, Czechia, Greece, Lithuania, Slovakia), Eurostat data is used which means these countries are reported only with a 2-month delay. Besides these two opt-out clauses, the final deal includes a list of derogations to partially reduce the 15% target and bring it down to single-digit territory. This will help us improve your experience. The goal is to cut consumption by 15% from August until March. One derogation will apply to countries that are poorly connected to other member states and demonstrate they export liquefied natural gas (LNG) to the "fullest" of their capacity. For four countries (Denmark/Sweden, Finland, Germany, Poland) an implied demand is calculated by comparing imports, exports and changes to storage volumes from one month to the next, as, Data are available at industry and household level for Belgium, Luxembourg and Italy via ENTSOG. Spain and Portugal, who have long argued about the Iberian peninsula's unique energy landscape, pushed for this change and will be among the first beneficiaries. When choosing demand reduction measures, member states agreed that they shall consider prioritising measures that do not affect protected customers such as households and essential services for the functioning of society like critical entities, healthcare and defence. July 20, 2022 12:29 pm. For Denmark/Sweden, Finland and Poland, the same calculation is made using Bruegel implied demand. H\n0E|""I$5H CpT*Xk ws_,#S7xM- 6YfYF3O;,|q;LxF0ynj>F/eZl)6/jYo\2M4A'7ANAib!S1jb#potbW2ItT)SeFc(#k[e2:5xgz^O NzvFFp#u#Hnn7R X JGTW5vzBq ~ V Subtracting power gives industry demand, and the residual is household demand in Romania. The initiative includes measures and recommendations aiming at empowering the EU to resist to further gas supply cuts from Russia in the coming months and sets gas supply prioritization criteria for non-protected customers . endstream endobj 94 0 obj <>/Filter/FlateDecode/Index[35 14]/Length 20/Size 49/Type/XRef/W[1 1 1]>>stream startxref For example, if a country has managed to slash its gas consumption by 5% by the end of November, and a Union alert is triggered in early December, the country will have to cut its consumption by 10% until March to reach the overall 15% mark. <<58F270B5D7E13D4697BD90E65FB61DE8>]/Prev 685305/XRefStm 1607>> France's plan to cut energy . Ben is working for Bruegel as a Consultant in the field of Energy and Climate Policy. 0000032747 00000 n Other cookies are used to boost performance and guarantee security of the website. 0 In all cases, 2022 values are compared to the average from 2019 to 2021. Therefore, an electricity output of 1MWh implies 2MWh gas demand. The European Commission proposed on 20 July a new legislative tool and a European Gas Demand Reduction Plan, to cut gas use in Europe by 15% through next spring. National fiscal policy responses to the energy crisis. Member states will update their national emergency plans that set out the demand reduction measures they are planning, and will regularly report to the Commission on the advancement of their plans. 0000002052 00000 n The Community Executive has proposed a new regulation that would allow the European Commission to declare security of gas supply alarming and impose mandatory cuts in gas consumption. Critical industries, such as food, health and defence, will be a top priority, followed by services that operate cross-border and ensure the proper functioning of the single market. French data is from GRTGaz. Three countries will be entirely exempted from the Union alert system: Ireland, Malta and Cyprus. The new Regulation would also give the Commission the possibility to declare, after consulting Member States, a 'Union Alert' on security of supply, imposing a mandatory gas demand reduction on all Member States. Previously, he studied his BSc Economics at the University of Warwick, with one year spent studying at the University of Monash, Melbourne. Estonia and Latvia also form a joint balancing zone but make data available at the national level. Last month, Germany activated the second phase of its three-stage emergency plan, the prelude to rationing, as flows through Nord Stream 1 continued to decrease at a worrying pace. The purpose of the gas demand reduction is to make savings for this winter, in order to prepare for possible disruptions of gas supplies from Russia, which is continuously using energy supplies as a weapon. Budapesthad previously declared a state of emergency, restricting the export of energy supplies, a decision Brussels warned runs counter to the principle of solidarity and single market rules. All consumers, public administrations, households, owners of public buildings, power suppliers and industry can and should take measures to save gas. This dataset tracks monthly natural gas demand by EU country, with a breakdown of the power, industry and household sectors wherever possible. Coordinated action is needed now, with efforts by all Member States to reduce gas demand. The goal is to cut consumption by 15% from August until March. 0000063591 00000 n %PDF-1.7 % To get more information about these cookies, how and why we use them and how you can change your settings, check our cookies policy page. The EU is facing a potential security of supply crisis with significantly reduced gas deliveries from Russia and a serious risk of a complete halt, for which member states need to prepare immediately in a coordinated fashion and a spirit of solidarity. Use of the, Below is a description of the methodology for reporting which table A1 summarises, For some countries (Belgium, Bulgaria, Croatia, Estonia, Hungary, Italy, Latvia, the Netherlands, Portugal, Romania, Slovenia), the ENTSOG platform consistently reports total gas demand and this is our preferred source. Member states agreed to reduce their gas demand by 15% compared to their average consumption in the past five years, between 1 August 2022 and 31 March 2023, with measures of their own choice. OS)z Simone Tagliapietra and Trading Hub Europe provides industrial demand level data for Germany. Year-to-date refers to the period January until the end of the last reported month. Open Medicines for Europe letter ahead of the Energy Council 27 September 2022 For the last decade, off-patent medicines, which represent the 70% Medicines for Europe welcomes European Commission decision 8 April 2020 OPEN Baton passes from Christoph Stoller to Rebecca Guntern as 1 October 2021 Rebecca Guntern (Sandoz) today begins an interim term as President 0000063554 00000 n For Romania and Portugal, Final Consumers are reported we consider this to be industry and power. Giovanni Sgaravatti and Data are available at industry and household level for Belgium, Luxembourg and Italy via ENTSOG. The regulation foresees the possibility for the Council to trigger a 'Union alert' on security of supply, in which case the gas demand reduction would become mandatory. 0000032286 00000 n Europe is facing the possibility of a gas shortage this winter due to unreliable Russian deliveries, against the background of the Russian invasion of Ukraine. The figure shows the percentage change in demand in 2022 due to each individual sector. S&P Global Commodity Insights. to that end, the communication proposes a new european gas demand reduction plan, drawing on best practices from across the union, accompanied by a council regulation envisaging an immediate recommendation for a voluntary gas demand reduction of 15% in all member states over at least the next 8 months, and introducing a process to trigger a 49 0 obj <> endobj 0000244148 00000 n The Commission is therefore proposing today a new legislative tool and a European Gas Demand Reduction Plan, to reduce gas use in Europe by 15% until next spring. 0000243539 00000 n The Council agreed that member states that are not interconnected to other member states gas networks are exempted of mandatory gas reductions as they would not be able to free up significant volumes of gas to the benefit of other member states. Coordinated action is needed now, with efforts by all Member States to reduce gas demand. Please send any comments or requests to Ben McWilliams ([emailprotected]). All consumers, public administrations, households, owners of public buildings, power suppliers and industry can and should take measures to save gas. This is complemented in certain cases by national transmission system or market operators (Enagas, GRTGaz, THE) and for power we use the ENTSO-E transparency platform to obtain the electricity produced in gas fired power plants (see below). All consumers, public administrations, households, owners of public buildings, power suppliers and industry can and should take measures to save gas. Dwindling gas flows through Nord Stream 1 have put European leaders on edge. European Council President's speeches and statements, Council regulation on coordinated demand-reduction measures for gas, Member states commit to reducing gas demand by 15% next winter (press release, 26 July 2022), Commission proposal for a Council regulation on gas demand reduction, 'Save gas for a safe winter' Commission communication, 'Save gas for a safe winter' Commission communication annex, Energy prices and security of supply (background information), How Russia's war in Ukraine has impacted markets (background information), EU response to Ukraine invasion (background information), send your request to the public information service. endstream endobj 59 0 obj <> endobj 60 0 obj <>stream For some countries (Belgium, Bulgaria, Croatia, Estonia, Hungary, Italy, Latvia, the Netherlands, Portugal, Romania, Slovenia), the ENTSOG platform consistently reports total gas demand and this is our preferred source. hbba`b``$ H 0000013298 00000 n The Commission is therefore proposing today a new legislative tool and a European Gas Demand Reduction Plan, to reduce gas use in Europe by 15% until next spring. Shortly after publication on 6 October 2022, we updated the estimate for German household demand to that provided by Bnetz. In these cases, power is subtracted from total to give a residual that is called industry/household. Countries that use gas molecules in critical industries and cannot replace them overnight will also be able to request a partial reprieve. Guidelines on a European Gas Demand Reduction Plan Introduction This EU winter preparedness plan aims at further supporting Member States in the coming weeks and months, and at reinforcing the resilience of the internal market in case of a gas security of supply emergency. HWnF}WQ}' lu L6hnv"5@]$NU~i]Es::~.W,')1NNLkXSI&V:LqE"%b2N"vU>el](xdwmL"xK~_0s8p1]Olo)&. A senior EU official, speaking on the condition of anonymity, admitted the special provisions mean the final savings will be somewhere between 45 bcm (cold winter scenario) and 30 bcm (normal winter), but without fully reaching the higher figure. So far in 2022, we estimate that EU natural gas demand (which does not include storage filling) has declined 7% compared to the average from the period 2019 to 2021. Because . Previously, he worked at the German Ministry of Finance, the German Institute for Economic Research in Berlin, the energy think tank LARSEN in Paris, and the policy consultancy Berlin Economics. This is seen as a "reward" for those who strive to stock as much gas as possible ahead of the winter season. The clock, however, will not start from zero: the calculation will take into account the previous efforts made on a voluntarybasis. The Commission has adopted a European Gas Demand Reduction Plan with best practices and guidance for Member States, to help them reduce gas demand by 15% from 1 August to 31 March 2023 and to prioritise which industrial sectors should make savings. It is managed by the General Secretariat of the Council, the body of staff responsible for assisting the Council of the EU and the European Council. If methods like fuel switching and temperature limits are not enough to reach the target, some countries, like those heavily dependent on Russian gas, might have to resort to gas rationing. For Romania and Portugal, Final Consumers are reported we consider this to be industry and power. The plan proposes a voluntary gas demand reduction for all EU Member States by 15 percent between 1 August 2022 and 31 March 2023, but in emergency, the target will become binding. With 12 EU countries subject to partial or complete interruptions of Russian gas, there's concern among governments that the Kremlin could further retaliate in response to sanctions by fully interrupting the supply. EU officials are confident that "peer pressure" among states could help enforce the savings plan and prevent infractions. Most of this reduction was driven by industry, as households do not consume much gas in September and gas reductions were not apparent in the power sector. endstream endobj 61 0 obj <>stream We want to hear your feedback about our website. 0000010281 00000 n 0000011001 00000 n Table 1 shows results. 0000000016 00000 n GRTGaz provide industry and household level data for France which is complemented with Terega data available from ENTSOG. Use of the ENTSOG transparency platform is prioritised where available. His work involves data-driven analysis to critique and inform European public policy, specifically in the area of the energy sector and its decarbonisation. Residential consumers account for approximately 40% of winter gas demand in the Europe Perimeter and small changes to their behavior could have a sizable impact on the region's gas balance. To increase the EUs security of energy supply, the Council today adopted a regulation on a voluntary reduction of natural gas demand by 15% this winter. Gas is the EU's leading source for heating. Figure 1 visualises monthly natural gas demand by country, the top bar allows scrolling through different countries. While for Belgium and Italy, data are available from ENTSOG. 0000016659 00000 n In these four cases, numbers are updated with actual Eurostat demand when that becomes available (at a 2-month delay). Here, Eurostat monthly gas demand data (NRG_CB_GASM) are used for the historical comparison period (2019-21). Each government commits on paper to meet the 15% target by the end of March through methods such astemperature limits on air conditioning and heating, switching to alternative fuels and postponing the phase-out of nuclear energy. 95 0 obj <>stream For a better user experience please update your browser or use. 0000001775 00000 n GRTGaz provide industry and household level data for France which is complemented with Terega data available from ENTSOG. A European Gas Demand Reduction Plan Europe is facing the possibility of a gas shortage this winter due to unreliable Russian deliveries, against the background of the Russian invasion of Ukraine. 0000013323 00000 n This content is not available in your region, Winter is coming: All you need to know about the EU's 15% gas reduction plan. For many countries (Bulgaria, Croatia, Estonia, Hungary, Latvia, Slovenia, Spain) reliable total demand and power demand data exists but no split between industry and household. Although not all member states are currently facing a significant risk of security of supply, severe disruptions on certain member states are bound to affect the EUs economy as a whole.
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