EU plans to relax gas storage filling targets for member states

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The EU member states plan to relax its gas storage refilling goals, as it tries to reduce the market disruption that was refrained from stock for winter.

The European Commission Wednesday said they wanted to give more flexibility about when and how many storage to create countries, as it was imagined that the block could not reach its mandatory goals this year.

The Commission says “more flexible filling tractors with the help of the Commission can help reduce the pressure of the system and avoid market deformation with gas storage refilling, supporting refilling to protect better purchase and supply,” the Commission has said. It did not provide more details about its plan.

In storage gas acts as an important buffer for blocks during the winter months, when demand is maximum, the market restriction reduces. The EU introduced a minimum of 5 percent of the storage capacity in each country after the full-scale invasion of Russia in 2022 and then introduced a target of 5 percent per year to hit on November 7.

However traders have warned that the policy is being disrupted Natural gas The market, raising prices during the summer and preventing the production of gas in storage this year.

Traders say that these controls were forced to buy countries at the same time contributed to the market deformation.

“In reality, the regulations implemented for the security of the market in the next winter, the market has actually distorted the market long ago,” said a businessman.

It is not clear how the Commission’s plans will affect the target of November 1 in this year or next years.

This winter, the combination of cool weather, producing less power from the wind and from Russian pipeline reduces gas From the New Year to Ukraine, the region had to draw more than its storage than the previous years.

When the demand is low, the natural gas history of Europe becomes cheap in the summer. It provided an incentive to buy and store gas in the past and then sell it at a profit during the winter peak heating season. However, this year there has been an inconsistency in the market to buy more gas this year to meet the EU’s goals, where summer gas prices are higher than winter.

This is “the true headache for Europe” because it indicates to the traders that they do not make any money from placing gas storage this year “, the product data firm’s lorra pages, gas and LNG insight director said.

The premium of the summer gas premium compared to winter prices reaches more than $ 6 per megawatt at the end of January, which is the highest, priced agency Argus, although it has narrowed.

The EU gas savings were full of 40.3 percent until Monday, it was more than 20 percent of last year’s points. “If you look at the current market terms, there is a possibility that the EU will be less than 90 percent of its target,” said Rabobank’s power strategy.

In some countries such as Austria and the Czech Republic, there are separate storage goals on their average use, which is low. But in these abusive goals, the premium of the summer price “created a lot of uncertainty”, said David Luff, senior manager of Argus analysis and advice.

He said in Germany, who has a law that has forced 90 percent of the storage to fill the storage by November 7, not more than half of the storage capacity has been stored since April 25, he said.

Summer prices have risen more than winter prices by 2022, in the strength of the continent. Traders were refrained from buying gas to keep storage and needed government intervention in some countries.

In Germany, a consortium of transmission system operators, from the government, bought 5 TH prices in 2022, spent about $ 1 billion, at a cost of € 144/megawatt, higher than the price of winter. It can still fully recover the expenditures.

“After the Russian aggression war in 2022, the level of goals was equitable for the facility of gas savings in a certain crisis situation. The The[but]The situation is now declined, “German Energy Lobby Group BDU Chairman Curstin Andre said. The group has called for a reduction of the need for legal conservation of Germany to 5 percent.

“Legal requirements have a big impact on market behavior and this is a false incentive for the seasonal coverage,” he said. “Reduction of national filing level targets for the benefit of the gas savings from 90 to 80 percent can help the market to calm the market.”