Thursday

2nd Apr 2020

Russian gas less mighty than it looks, EU says

  • Oettinger: 'no household in the EU has to be left out in the cold' (Photo: qwertyuiop)

A Russian gas cut-off would have a “substantial impact” on eastern Europe, but even the most vulnerable countries - Bulgaria, Estonia, and Finland - could get through the winter.

The European Commission “stress test”, published in Brussels on Thursday (16 October), estimated what would happen if there was no Russian gas for the next six months.

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It noted that Bulgaria and Finland would end up with gas supply shortfalls of 100 percent, while Estonia would miss 73 percent.

Lithuania (59%), Hungary (35%), Romania (31%), Poland (28%), Greece (18%), Slovakia (17%), Latvia (15%), and Croatia (12%) would also suffer.

But the impact is less worrying than it looks at first glance due to possibilities of: tapping storage vats (currently 90% full in most of Europe); using interconnectors to move gas round the EU; buying more liquid gas on world markets; boosting imports from Norway; and switching to other fuels, such as biomass.

Latvia, for instance, buys 100 percent of its gas from Russia. But it also hosts a massive storage facility - Incukalns - which is filled up every summer and which normally sells gas back to Russia in winter.

Lithuania also gets all its gas from Russia, but is set to open a liquid gas terminal at Port of Klaipeda in December.

Meanwhile, gas accounts for just 10 percent of the total energy mix in Estonia and Finland. Estonia relies primarily on its own oil shale, while Finland uses a mixture of fossil fuels, nuclear, hydro, and wind power.

The survey said the Baltic and some central European states might have to curb power supplies to “non-protected customers [non-households], particularly towards the end of the modelled period”.

It also said the greater imports of liquid gas would come at a price.

But it added that Finland could “replace all the [Russian] gas volumes without the need to curtail demand”.

The study said Bulgaria, which is “long on electricity”, could trade it for Greek gas “to keep both sectors stable in the two member states”.

Bulgaria might also be allowed to keep its Varna coal plant running beyond the agreed closure date of 31 December.

Energy commissioner Gunther Oettinger told press: “If we work together, show solidarity and implement the recommendations of this report, no household in the EU has to be left out in the cold”.

"We can show to our Russian partners there is no point in using gas as a political strategy because we’re ready for it”.

He said the worst case scenario is “unlikely” and added that he is “optimistic” Russia and Ukraine will clinch a deal on winter prices “by next week”, safeguarding EU transit.

EU countries had asked for the stress test back in May due to the Ukraine conflict.

The EU’s most severe sanctions options on Russia involve stopping purchases of oil and gas if the war continues to escalate.

EU leaders meeting in Brussels on 23 and 24 October will also discuss energy security.

Draft conclusions dated 13 October and seen by EUobserver speak of “a possible major disruption [of Russian gas supplies] in the upcoming winter”.

The leaders are to agree “urgent measures” to reach an old target of having electricity interconnectors capable of carrying 10 percent of installed capacity.

They are to boost the target to 15 percent by 2030.

They also aim to give the commission more of a say when EU states negotiate supply contracts with Russia in future.

“In order to increase the EU's bargaining power in the energy negotiations … member states and involved companies provide relevant information to the commission and systematically seek its advice throughout negotiations”, the draft text notes.

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