Monday, August 8

Spain agrees with the EU that the reduction in gas consumption reaches 7% instead of 15%


The discount is not automatic. Spain – like Portugal or Italy – has to demonstrate that it meets the conditions. But it is within reach, because it coincides with the argument defended by the Government in the meetings: that there are few interconnections with the rest of Europe, so the linear saving of 15% would not serve to forward the gas to the rest consumed. And, furthermore, that Spain can help to forward liquefied or regasified natural gas by ship.

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If these conditions are met, Spain can request that its gas saving requirements be reduced. And, instead of having to reduce consumption by 15%, it could stay at 7%, as explained by community sources.

“We know that support at all levels is going to be essential to be able to achieve energy savings of around 7% or 8% of our current gas consumption”, said the fourth vice president and minister of Ecological Transition, Teresa Ribera: “But there is a second contribution that is fundamental and that makes us unique: the additional value of Spain’s position. We are the most important port of entry for liquefied natural gas for the whole of the European Union. We have the possibility of reinforcing that capacity for the benefit of all, making expensive, complex infrastructures available to all, which cannot be built in a few months”.

“It is an agreement that seeks a significant reduction in gas, with limited exemptions that are not automatic”, explain community sources: “There is a need for everyone to make significant efforts, and the agreed text is very elaborate. From now on, there will be mechanisms by which the Member States will be constantly discussing in a changing situation, depending on the situation, we have seen it with the vaccines, we launched a mechanism for all, and we have been adapting. The philosophy is the same, and that is why we are so happy, because it is a political base that allows us to manage the crisis as it evolves, and find a common path”.

Thus, Ribera has continued: “Therefore, strengthening our gas pumping storage capacity through the two existing gas pipelines, reinforcing its potential. But also, as we have been doing between Barcelona and Livorno, facilitating the liquefied natural gas stored in Spain to be sent to other liquefied natural gas plants in smaller ships. All of this will contribute greatly to the security of supply for the rest of the European countries”.

Sources from the European Commission have explained that the figure of 15% reduction in the EU has to do with trying to reduce gas consumption by 45 bcm, according to the studies of the last five winters, taking into account that it may even be harder, in case Russia cuts gas in response to EU sanctions for the invasion of Ukraine.

As explained by the Community Executive, there are three automatic exceptions, due to the lack of interconnections with the rest, which are the three islands: Malta, Cyprus and Ireland.

From there, the rest of the exceptions are conditional, depend on the circumstances and must be demonstrated. For example, the three Baltic countries are still synchronized with the Russian electricity system, and if the Kremlin cuts off their gas, they will not be able to reduce their gas because they may need it to generate electricity, for example.

There may also be exemptions in the event of an extraordinary electrical crisis, such as a significant hydroelectric outage, for example.

Then there is the derogation for less interconnected countries, such as Spain, Portugal and Italy. “The 15% cut has a limited impact, because they cannot transfer gas to the rest of the market. It is a partial derogation, it is a kind of compensation, conditional on them showing that they cannot forward the gas. If someone benefits from the derogations and then does not respond to the demands of the rest, the derogations end.

And then there is the exception applicable to those who have reached 80% gas storage, the level decreed by the European Commission.

With all these derogations, and bearing in mind that a normal winter might need 30 bcm if Russia cuts off gas, the Commission believes that the 15% exemptions would leave the savings below 45 bcm, but well above 30 and within the margins to be covered.

And how is the alert activated so that gas savings go from voluntary to mandatory? In the regulation, it is Brussels that can propose an alert in the EU if circumstances arise that endanger supply. Or that there are five countries that have decreed a national alert and ask for it. From there, the Council of the EU – the Governments – approves it by qualified majority.

However, Viktor Orbán’s Hungary has again opposed it, but this time its refusal has not blocked the decision, because it did not require unanimity: “For Hungary, this decision is completely unacceptable. The proposal completely ignores the interests of Hungary, and is more harmful to EU citizens than to those against whom it is made.”





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