With Russia’s invasion of Ukraine likely to cause significant energy shocks for the European Union, the European Commission wants to ensure that EU gas stocks are at least 80% full on average by 30 September this year in order to prepare the Union for the coming winter, says a new draft of its Energy Communication, obtained by EUROPE on Tuesday 1 March.
In order to achieve such a level of storage, the institution envisages urging Member States to take certain measures such as requiring gas storage users to maintain a minimum volume in underground storage facilities, requiring storage facility owners to tender for capacity or requiring transmission system operators or balancing operators to purchase and manage strategic gas stocks.
According to the draft text, it will also propose a stock transparency mechanism to ensure that action is taken quickly, if the filling rates of facilities are not sufficient to reach the 80% target by 30 September.
While the current EU legislative framework already guarantees a discount of at least 50% on transport tariffs to storage, the draft shows that the Commission is also considering the possibility of increasing this discount to 100% in order to encourage the filling of storage facilities.
In addition, the Commission is considering introducing a legal obligation for Member States to ensure a minimum level of gas storage by 30 September each year. This measure already appeared in the previous version of the text (see EUROPE 12894/5).
Exceptional tax measures on electricity producers
While the draft puts more emphasis on measures to reduce the EU’s energy dependence than its previous version (a change that can be explained by recent events in Ukraine), the text also includes proposals to support households and businesses in the face of rising energy prices, exacerbated by the current geopolitical situation.
It states that “in the current crisis situation, Member States may exceptionally decide to introduce tax measures which seek to capture some of returns that certain electricity generators gain”.
Such a measure “would partly prevent that current high gas prices increase the costs incurred by final customers, while preserving efficient marginal wholesale electricity prices”, the text says.
It should also be limited in time (the draft proposes an initial duration of no longer than 30 June 2022) and “carefully designed to avoid unnecessary market distortions, while incentivising additional investment in renewable energy”.
Originally scheduled for 2 March in the Commission’s provisional agenda, the presentation of the Energy Communication has been postponed. Although the Commission has not yet communicated a new date, the Communication could be presented next week during the European Parliament’s plenary session.
See the draft: https://aeur.eu/f/k7 (Original version in French by Damien Genicot)