Russia’s largest buyers of Russian gas rushed Monday to find alternative fuel supplies and could burn more coal to deal with Russia’s reduced gas flows threatening an energy crisis in the winter if stores are not refilled.
Germany, Italy, Austria and the Netherlands have indicated that coal-fired power plants could help see the continent through a crisis that has raised gas prices and added to the challenge facing policymakers. they fight inflation.
The Italian Eni said that the Russian company Gazprom told it that it would only receive a part of its gas supply request on Monday, which pushed the country to declare a state of alert that will activate measures of gas savings.
Germany, which has also experienced lower Russian flows, announced on Sunday its latest plan to increase gas storage levels and said it could restart coal-fired power plants it intended to eliminate.
“This is painful, but it is an absolute necessity in this situation to reduce gas consumption,” said Economy Minister Robert Habeck, a Green Party member who has pushed for a faster exit of coal, which produces more greenhouse gases. greenhouse effect.
Russia-owned Gazprom, whose logo is seen here, told Italian energy company Eni that Italy will only receive a portion of its gas supply request. (Reuters)
“But if we don’t, we run the risk that storage facilities will not be full enough by the end of the year towards the winter season. And then we are politically blackmailing.”
Russia on Monday reiterated its previous criticism that Europe should only blame itself after the West imposed sanctions in response to Moscow’s invasion of Ukraine, which is a gas transit route to Europe, and Russia. a major exporter of wheat.
The Dutch first month’s gas contract, the European benchmark, was trading at around 124 euros ($ 170 Cdn) per megawatt hour (MWh) on Monday, below this year’s high of 335 euros ($ 458 CDN), but still more than 300 percent. at its level a year ago, before prices started to skyrocket.
Filling inventories slowly
RWE CEO Markus Krebber, Germany’s largest energy producer, said energy prices could take three to five years to fall again.
Russian gas flows to Germany via the Nord Stream 1 pipeline, the main route to Europe’s largest economy, were still operating at about 40 percent of their capacity on Monday, although they had increased since from the beginning of last week.
Ukraine said its pipelines could help fill any supply gaps through North Stream 1. Moscow has previously said it could no longer pump through pipelines that Ukraine has not yet closed.
The pipes of the ground facilities of the “Nord Stream 1” gas pipeline are shown in Lubmin, Germany, on March 8. (Hannibal Hanschke / Reuters)
Eni and the German company Uniper were among the European companies that said they received lower volumes of Russian gas than contracted, although Europe’s gas inventories are still filling up, albeit more slowly.
On Monday, they were about 54 percent full, compared to the European Union’s target of 80 percent in October and 90 percent in November.
The German Ministry of Economy said that the recovery of coal-fired power plants could add up to 10 gigawatts of capacity in the event that the gas supply reaches critical levels. A law related to the movement passes in the upper house of Parliament on July 8.
In addition to a change to coal, the latest German measures include a system of auctions that will begin in the coming weeks to encourage the industry to consume less gas and financial aid for the German gas market operator, through the KfW state provider, to fill gas storage facilities faster.
RWE said on Monday that it could extend the operation of three 300-megawatt (MW) brown coal-fired power plants if needed during the gas supply crisis.
Russia blames the West
The Austrian government agreed on Sunday with Verbund to convert a gas-fired power plant to use coal if the country faces an energy emergency. OMV said on Monday that Austria should receive half the usual amount of gas for a second day.
Dutch broadcaster NOS reported on Monday that coal-fired power plants in the Netherlands could increase production to help depend on Russian gas, citing government sources. The Dutch Energy Minister was due to make an announcement about the gas supply at 15.30 GMT.
Last week, Russia-controlled Gazprom reduced capacity along Nord Stream 1, a major oil pipeline supplied by Germany and others, citing delays in returning equipment provided by the German company. Siemens Energy in Canada.
“We have gas, it is ready to be delivered, but the Europeans have to return the equipment, which should be repaired according to its obligations,” Kremlin spokesman Dmitry Peskov said.
German and Italian officials have said Russia was using this as an excuse to cut supplies.
Italy, whose technical committee will meet on Tuesday, has said it could declare a higher gas alert this week if Russia continues to curb supplies.
The measure would trigger measures to reduce consumption, including rationing gas for selected industrial users, increasing production at coal-fired power plants and requesting more gas imports from other suppliers with existing contracts.