Friday

19th Aug 2022

Dutch businesses 'not guaranteed' gas over winter

  • Dutch gas storage facilities are currently only half full, against average December levels of 80 percent (Photo: Bilfinger SE)
Listen to article

The new Dutch cabinet cannot ensure businesses will have access to gas over the winter, and some companies may have to take emergency measures, according to experts.

Dutch gas storage facilities are only half-full currently, against average storage levels in December of around 80 percent, experts told investigative platform Nieuwsuur this week.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Storage levels in the country during the winters of both 2018 and 2020 dropped by more than 50 percent, making the scenario of gas running out not altogether inconceivable, due to the low current storage levels.

The threat of gas shortages is especially daunting because it provides 44 percent of Dutch energy needs.

Households have special protection due to European legislation, but Dutch companies that depend on gas may need to switch to coal or other energy sources.

Over the summer, the cabinet was repeatedly warned of winter gas shortages.

But as late as October, the cabinet stated supplies were sufficient, with outgoing secretary of state, Dilan Yeşilgöz, telling press gas policy reforms were "unnecessary."

But faster than expected economic recovery, lower than expected supply from Russia and the US, plus high demand - especially in China - added to rising gas prices.

China's state-owned companies were forced to pay higher prices for gas, making it attractive for producers to send liquefied gas there.

High prices, in turn, led to slow replenishment by energy companies in Europe.

"Traders and operators prefer to buy gas in the summer when the price is low, and then sell it during the winter for a higher price. But prices over the summer have not been low, so companies saw no profit in buying expensive gas," associate professor at TU-Delft, Aad Correljé, told EUobserver.

And while storage levels all over Europe are lower than usual, problems in the Netherlands are more pronounced.

France, Italy, Spain, Poland all have regulation ensuring gas storage facilities are well filled at the beginning of the winter, but the Netherlands along with Germany and Austria do not. But the Netherlands is even more reliant on gas, with 92 percent of households using gas for heating - the most of any EU country.

Gasunie, the state-owned company that regulates the transport of Dutch natural gas, warned market players on 21 July to "take responsibility" and safeguard the security of supply, but it lacks regulatory leverage like France.

Historically this has not been a problem.

Due to a giant gas reservoir underneath the province of Groningen, cheap gas has been abundantly available in the Netherlands since the 1960s.

But rising fears over earthquakes forced the government to phase out gas extraction since 2019. This has increased dependence on Russian and Norwegian imports.

What happens if gas runs out?

If gas runs out, the gas protection and recovery plan, drawn up by the ministry of economic affairs and climate, will kick into action.

Users may be asked to reduce gas use or be hit with higher taxes.

In the unlikely event of a full-scale gas crisis, some industries or regions may have to be forced to shut down or switch to another fuel such as coal.

Opinion

Why did gas prices suddenly spike?

The 29 September historic high of $1,000 per thousand cubic metres for natural gas is not likely to be the final one this year, as European economies are still in desperate need to fill their storage facilities before winter.

Gazprom chief warns EU on higher gas prices

Gazprom chief Alexei Miller has said the EU's planned energy union will raise the cost of Russian gas and warned that his company will stop supplying gas through Ukraine in 2019.

EU energy ministers clash amid gas price uncertainty

EU energy ministers met on Thursday to debate spiking gas and electricity prices, and clashed over market reform - with some countries, led by Germany, opposing actions put forward by France and others.

News in Brief

  1. China joins Russian military exercises in Vostok
  2. Ukraine nuclear plant damage would be 'suicide', says UN chief
  3. Denmark to invest €5.5bn in new warships
  4. German economy stagnates, finance ministry says
  5. Syria received stolen grain, says Ukraine envoy
  6. Truss still leads in next UK PM polling
  7. UN chief meets Zelensky and Erdogan over grain exports
  8. Fighting stalls ahead of UN visit, Ukraine says

Stakeholders' Highlights

  1. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  2. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  3. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  4. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  5. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  6. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis

Latest News

  1. European inflation hits 25-year high, driven by energy spike
  2. No breakthrough in EU-hosted Kosovo/Serbia talks
  3. Letter to the Editor: Rosatom responds on Zaporizhzhia
  4. Could the central Asian 'stan' states turn away from Moscow?
  5. Serbia expects difficult talks with Kosovo at EU meeting
  6. How scary is threat to Ukraine's Zaporizhzhia nuclear plant?
  7. Slovakia's government stares into the abyss
  8. Finland restricts Russian tourist visas

Join EUobserver

Support quality EU news

Join us