“Given the current price shocks and the volatility of the global LNG market, how do you see the role of indigenous gas resources to act as a collective mechanism for price stability for the entire Union?”
This is one of the main questions to be put to the energy ministers meeting on Wednesday 13 May in Cyprus, according to a Background Note consulted by Agence Europe.
The choice of this subject, which will be discussed at the working lunch of this informal EU Council, comes as no surprise, given that Cyprus, along with Romania, has the largest commercially exploitable gas reserves in the EU, and both countries have already made plans to increase their domestic production.
This discussion comes at a time when the Union’s dependence on external gas supplies (covering around 80% of its needs) has made it even more vulnerable to the disruptions caused by the war in the Middle East, affecting Qatari LNG production in particular (see EUROPE 13855/6).
Would one solution be to relaunch domestic gas production in Europe? EU production has halved over the last decade, due to the low level of investment in new exploration activities - and the decision by the Netherlands to close the huge Groningen gas field.
To respond to the current crisis in the longer term, the European Commission, for its part, has placed particular emphasis on the development of low-carbon energies and electrification in order to reduce dependence on fossil fuels (see EUROPE 13854/1).
This energy transition remains “the most effective strategy for achieving Europe’s strategic autonomy”, acknowledges the document from the Cyprus Presidency of the Council of the EU. “However, the development of indigenous gas resources can strategically complement the EU’s long-term security and decarbonisation goals by contributing to diversification and resilience goals”, it explains.
“The challenge is to define a regulatory and investment environment that incentivises the extraction of these domestic resources today - thereby lowering prices and securing supply - without locking us into carbon-intensive systems that undermine our long-term climate goals”, the text states. The latter highlights Romanian and Bulgarian gas drilling projects in the Black Sea, and Poland’s discovery last summer of a major field in the Baltic Sea.
“How can the EU best ensure that gas infrastructure remains a viable investment today while being strictly aligned with our long-term energy and climate goals?” the document nevertheless asks. And the Cyprus Presidency suggests that these investments could, in the future, be used for “the transition to hydrogen” (see EUROPE 13864/19).
In the early afternoon, the ministers will continue with a discussion on the lack of coordination between Member States on electricity storage. “While electricity storage currently delivers essential services across the entire value chain, serving as a critical tool for transmission and distribution system operators to manage congestion and grid balancing/stability, and for prosumers to optimise self-consumption, these services are not always recognised and remunerated accordingly across the EU”, deplores another note.
“Current infrastructure remains insufficient to fully leverage the complementarity of different energy mixes”, the note goes on to stress, underlining the “pivotal role” played by ACER (Agency for the Cooperation of Energy Regulators) in “identifying persistent barriers”, such as “lack of market access for new and small actors”, “complex administrative requirements” and “inefficient grid connection processes (that) continue to hold back progress”.
In the morning, the EU27 will have discussed the implementation of the AccelerateEU plan presented by the Commission last 22 April (see EUROPE 13854/1) and, in particular, the need for coordinated action to avoid fragmented responses and counterproductive measures in addressing the energy crisis. (Original version in French by Clément Solal)