EU should take measures against using gas as bargaining chip, expert warns

BRUSSELS

The EU needs to adopt measures, particularly rules on gas storage, that will make it harder to use gas supplies as a bargaining chip, Jakub Groszkowski, the executive director at Central Europe Energy Partners (CEEP) told Anadolu Agency on Tuesday.

Groszkowski accused Russia of using gas supplies as a political weapon in Moldova and behaving as an unreliable gas supplier towards the EU, exemplifying Russia’s recent decision on filling up gas storage in Europe.

“As we have all seen recently, a decision when to start filling up Gazprom’s gas storages in Austria and Germany had to be made and announced by President Vladimir Putin. The Kremlin does not hide that it is playing a political game, and the aim is to put NS2 [Nord Stream 2] into operation - against the EU law," he said.

Groszkowski urged EU leaders to learn from this lesson and adopt measures and instigate rules on gas storage to make it harder to use gas as a bargaining chip.

CEEP also expects that EU institutions will look at structural problems that have caused the current energy crunch, which he touted as a "European problem.”

He said the post-COVID economic growth and weather conditions in previous months contributed to energy price increases, but also stressed that other factors were at play, including structural factors like speculation on the ETS [Emissions Trading System] market and dependency on gas supplies from Russia.

"EU member states have some tools to alleviate some of the consequences of the crisis, but only at EU level can we adopt measures that will diminish the risk of a repeat of a similar crisis soon," he argued.

"Heating costs are growing"

The energy crunch has seen surging gas prices across Europe where coal is being phased out. However, some member states have reverted, at least temporarily, to coal to meet demand.

According to Groszkowski, higher energy costs are forcing many distributors to fold; a case in point was seen in the Czech Republic where major gas and electricity supplier, Bohemia Energy, ended supplies to almost a million households and SMEs in October. He explained that these supplies are now covered by so-called ‘suppliers of last resort', but these households are confronted with significantly higher costs.

He warned of the risk that other alternative suppliers in other EU member states could follow suit in the months to come, in the middle of the heating season.

"Heating costs are growing, so in order to avoid such a scenario many small heat producers and suppliers will have to increase their bills, which will increase the problem of energy poverty," he said.

"Natural gas is currently best available solution"

Groszkowski underlined the need to invest in new gas-related infrastructure to keep the sector resilient to fulfill its key role in the EU’s transition towards a net zero economy.

"We are convinced that natural gas, along with nuclear energy, should be deemed sustainable in the EU taxonomy rules. Of course, natural gas is a fossil fuel and methane is a powerful greenhouse gas, nevertheless, it is currently the best available solution for seasonal energy storage and flexible, dispatchable power generation," he said.

While acknowledging the role that green hydrogen and new batteries technologies will play in the future, he said that today’s problems should be solved with technologies that are available now in the gas sector.

He suggested waiting until spring to see what impact the energy crunch would have on the political discussion regarding the European Green Deal and the Fit for 55 package, which the EU revealed this July within the scope of the Green Deal with a pledge to reduce emissions by at least 55% by 2030 compared to 1990.

Currently, it is a polarizing issue both in the European Parliament and in the Council, he said.

“What we know already is that resilience of energy sector during the transition period is an issue that cannot be underestimated, and also we need to look more carefully on these elements of the Fit for 55 package that influences costs of transition on the households level," he said.

* Writing by Ebru Sengul Cevrioglu