Europe’s biggest buyers of Russian gas were vying to find supplies of alternative fuel on Monday and could burn more coal to cope with reduced gas flows from Russia, which threaten an energy crisis in the winter if stores do not refuel. .
Germany, Italy, Austria and the Netherlands have signaled that coal-fired power plants could help the continent get through a crisis that has led to soaring gas prices and added to the challenge facing inflation-fighting politicians.
Italy’s Eni said it had said Russia’s Gazprom would receive only part of its request for gas supplies on Monday, bringing the country closer to declaring a state of readiness, which will trigger gas-saving measures.
Germany, which also has lower Russian flows, announced on Sunday its latest plan to boost gas storage levels and said it could restart coal-fired power plants, which it aimed to phase out.
“It’s painful, but in this situation there is a clear need to reduce gas consumption,” said Economy Minister Robert Habeck, a member of the Green Party, which has called for a faster exit from coal, which produces more greenhouse gases.
Russian-owned Gazprom, whose logo can be seen here, told Italian energy company Eni that Italy would receive only part of its request for gas supplies. (Reuters)
“But if we don’t, we risk the warehouses not being full enough at the end of the year for the winter season. And then we are blackmailed on a political level. “
Russia on Monday reiterated earlier criticism that Europe was to blame for the West’s imposition of sanctions in response to Moscow’s invasion of Ukraine, a gas transit route to Europe and a major exporter of wheat.
The Dutch gas contract earlier this month, the European benchmark, traded around 124 euros ($ 170 Cdn) per megawatt-hour (MWh) on Monday, lower than this year’s peak of 335 euros ($ 458 Cdn), but still rose by more than 300 percent a year ago before prices began to rise.
Replenish stocks slowly
RWE CEO Marcus Krebber, Germany’s largest electricity producer, said electricity prices could take three to five years to fall back to lower levels.
Russian gas flows to Germany through the Nord Stream 1 pipeline, the main route to Europe’s largest economy, continued to operate at about 40 percent of capacity on Monday, although they have increased since early last week.
Ukraine said its pipelines could help fill any supply gap through Nord Stream 1. Moscow has previously said it can no longer pump through pipelines that Ukraine has no longer closed.
The pipes of the onshore facilities of the Nord Stream 1 gas pipeline are pictured in Lubmin, Germany, on March 8. (Hannibal Hanschke / Reuters)
Eni and the German company Uniper were among European companies that said they received less than the agreed volumes of Russian gas, although gas supplies in Europe are still replenishing, albeit more slowly.
They were about 54% full on Monday against the European Union’s target of 80% by October and 90% by November.
The German Ministry of Economy has said that the return of coal-fired power plants could add up to 10 gigawatts of power if gas supplies reach critical levels. A law on relocation goes to the upper house of parliament on July 8th.
Along with a return to coal, recent German measures include a tender system to be launched in the coming weeks to encourage the industry to consume less gas, and financial assistance to the German gas market operator, through state lender KfW, to speed up filling gas storages.
RWE said Monday it could extend the operation of three 300-megawatt (MW) brown coal-fired power plants if needed during the gas supply crisis.
Russia blames the West
The Austrian government has agreed with Verbund on Sunday to rebuild a gas-fired coal-fired power plant if the country faces an energy emergency. OMV said on Monday that Austria would receive half of the usual amount of gas for the second day.
The Dutch operator NOS announced on Monday that coal-fired power plants in the Netherlands will be allowed to increase production to help dependence on Russian gas, citing government sources. The Dutch energy minister was due to announce gas supplies at 3:30 p.m. GMT.
Russia’s state-owned Gazprom cut capacity last week on Nord Stream 1, a major gas pipeline supplying Germany and others, citing the delayed return of equipment serviced by Germany’s Siemens Energy to Canada.
“We have gas, it is ready for delivery, but the Europeans must return the equipment that needs to be repaired according to their obligations,” Kremlin spokesman Dmitry Peskov said.
German and Italian officials said Russia was using this as an excuse to cut supplies.
Italy, whose technical committee is expected to meet on Tuesday, said it could announce increased gas readiness this week if Russia continues to cut supplies.
This move will trigger measures to reduce consumption, including gas rationing for selected industrial consumers, increase production in coal-fired power plants and demand more gas imports from other suppliers under existing contracts.
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