Brussels, 16/02/2016 (Agence Europe) - It was under the slogan “Warming houses not the planet”, that the Commission unveiled the “winter package” or “security of gas supply package” on Tuesday 16 February, almost a year after the launch of the strategy for energy union. This is the second raft of measures in this major integration project backed by the Juncker Commission.
“This package provides a revised framework to strengthen the EU's resilience against possible gas supply disruptions. In terms of supply, it's about guaranteeing security and diversification. In terms of demand, it's about finding creative solutions to improve energy efficiency”, said Commission Vice-President with responsibility for Energy Union Maros Sefcovic.
The package sets out a wide range of measures to improve the resilience of the EU to breaks in gas supply, in view of the crisis in Ukraine and the “fragilities in certain regions of the EU”, revealed by the stress tests on its energy system in 2014, Sefcovic said.
“Our main goal is to lessen our vulnerability and our dependence on the exterior by means of diversification of our sources of supply, encouraging technologies such as LNG, improving regional cooperation and enhanced transparency in intergovernmental agreements (IGAs) and commercial contracts”, he added.
To these ends, the winter package contains two proposals for legislative review - one on the security of gas supply and the other on IGA transparency - and a strategy to improve access to LNG and the use of gas storage.
Through a proposal for the revision of the 2010 regulation on security of gas supply, the Commission is looking to introduce a new, more effective approach on the prevention and possible mitigation of gas supply crises. It wants first to root in legislation the solidarity principle under which neighbouring member states should, as a last resort in serious crises, guarantee supply to homes and essential social services, such as health care. It also proposes moving from a national to a regional approach to security of supply for the design of measures to improve supply security in order to ensure improved coordination among the member states, including more precise evaluation of common risks, possible simultaneous risks and available resources, through preventive plans and emergency plans to be established by nine zones/regions defined by the Commission. It proposes, too, enhancing cooperation with the EU's neighbouring countries which are members of the energy community. These countries will be involved to ensure more effective prevention and management of gas crises.
The other aim of the review of the 2010 regulation on the security of gas supply is to improve transparency on gas markets so that the member states can benefit from more liquid and competitive markets. In this, the Commission proposes additional transparency measures for gas contracts relevant to security of supply. The Commission and member states should be automatically notified by the gas companies of conclusion or amendment of such contracts. “Any trade contract of more than one year's duration and involving a market share that is significant to security of supply” (40%) will have to be notified, said Energy Commissioner Miguel Arias Canete. This measure, viewed as a way of diminishing the hold of Russia and its gas company Gazprom, could, in many cases, apply to other major suppliers, such as Norway and Algeria.
On the other hand, the idea of setting up a common central gas purchasing body to reinforce the negotiating power of certain member states which are dependent on a single supplier is not included in the draft and has been relegated to the rank of the voluntary options. “This kind of mechanism could have an impact on the market”, Cañete stated. Observers have expressed concerns that in reaction to this mechanism, Russia may get together with other suppliers to form a gas cartel based on the OPEC model.
Through the revision of the 2012 decision on the transparency of IGAs between member states of the EU and third countries in the field of energy, the Commission is proposing to create a mechanism for the obligatory pre-consultation of the Commission by member states before such agreements are signed. Controls by its services on the compliance of the IGAs with the competition rules and legislation on the single energy market of the EU will no longer be ex-post, as the regulation provides for, but ex-ante. This would mean that before an agreement is negotiated and duly signed and concluded, the member states would have to take full account of the opinion of the Commission.
The Commission is also proposing a strategy for LNG and gas storage, in order to allow the EU to take advantage of a global market on the up and to reduce regional disparities in terms of access to this alternative source (and, in particular, to reduce the dependency of the Baltic states on Russia). The essential elements of this strategy are the construction of the strategic infrastructure needed to complete the single market, the implementation of priority projects in certain regions - Baltic Sea region, Central and South-Eastern Europe, South-West Europe - and increased cooperation with the supplier countries.
Lastly, this raft of measures also comes within the objective of energy transition, in the wake of the climate agreement concluded at COP 21 at the end of last year, and the moderation of demand. In this context, the Commission is also proposing a strategy on heating and cooling in buildings and industry, which represent nearly half of the energy consumption of the EU.
The strategy proposed is based around removing obstacles to the decarbonisation of buildings and industry. It also stresses the impact on energy security of improving energy efficiency and the increased use of renewable energy.
“This strategy shows what we can do more to consume less whilst using smart technologies and smart financing systems. This will allow Europeans to have warmer temperatures without spending too much and without polluting”, Sefcovic concluded. (Original version in French by Emmanuel Hagry)