‘Act now to prevent a winter disaster,’ say energy experts

It will be ten days of nail biting for Europe. As of Monday, Russian state gas company Gazprom will begin ‘technical maintenance’ of Nord Stream 1, one of the main pipelines supplying Europe with natural gas. The fear is that it will not stop at those ten days. That Gazprom continues to throttle the influx after that. Or maybe completely shut down.

If that happens, the EU will have a big problem. The gas coming in through that pipeline is crucial for filling winter supplies. If there is not enough in four months, it will be a harsh winter for tens of millions of European households and countless companies that will probably have to go on rations. In the energy war with Russia – 12 of the 27 EU countries are already partially or completely cut off from Russian gas – it could be a tipping point.

Alarm phase

European politicians are reacting long-suffering to the escalating gas crisis, as if the gas market was still functioning normally. Minister Rob Jetten (Climate and Energy, D66) says he cannot force Gazprom to fill the ‘Russian’ part of the storage in Bergermeer, nor does it seem to be an option to fill that part itself, according to research by NRC† The German government has declared the ‘alarm phase’, but the corresponding measures have not yet been taken. Berlin would rather wait a little while, not sow too much unrest.

Critics call it oily. Energy consultant Cyril Widdershoven says: “We must do everything we can now to prevent a disaster in the winter. If you need to act later, it’s too late. If it starts to freeze, you won’t be able to get gas within a week – not even within three months. So when Minister Jetten says that everything will be fine, he is naive. This is the optimism of a sea sailor who thinks he will still win with a torn sail, headwind and in place 25 in the race. It is war. So act accordingly.”

If Minister Jetten says that everything will be fine, he is naive. It is war. So act accordingly

By this he means: the Netherlands must quickly do a lot more work on purchasing extra gas. Even if it costs billions. Jetten is apprehensive about this, for fear that prices on the market will skyrocket, but according to Widdershoven, that should be the case. “We have also spent billions on corona support in recent years, for hairdressers and chip shops, so why not now? This crisis affects everyone.”

Prevention paradox

That politicians are reluctant, at least in public, is understandable. To intervene much harder now is an unpopular message. Moreover, they are acutely aware that overly strong statements have a direct effect on the market. The more panic they radiate, the more prices can go up.

It illustrates the dilemma that politicians now face, in the middle of the summer. “The classic prevention paradox,” says Georg Zachmann, energy analyst at the Brussels think tank Bruegel. “It is comparable to taking corona measures. If you do not intervene in time, you run great risks. But if you prepare thoroughly, you look like an idiot because you take very expensive measures.”

Politicians should communicate much more clearly, according to Zachmann. “They have to say, ‘This winter is going to be really tough. We still have a few months, we have to use them well. Prepare yourself.’ Politicians should encourage people to better insulate their homes. And that they now start with behavioral change.”

He calculated that with a complete Russian shutdown, Europe would have to cut its gas consumption by 15 percent to get through the winter. But the regional differences are large: while in the Baltic states it is 54 percent, countries such as France and Spain hardly need to cut.

Also read: How the German government keeps energy company Uniper afloat at any cost

Little has happened so far at European level. The European Commission has only obliged member states that their surcharges are at least 80 percent full before November 1 (that was a concession to difficult member states, the Commission initially aimed at 90 percent). The Commission would also like to purchase gas from the market on behalf of all EU countries together, in order to negotiate lower prices, just like in the corona crisis with vaccines.

The lack of European decisiveness is not surprising. Member states traditionally deal with issues that affect national security, says Arjen Boin of Leiden University. He is professor of public institutions and public administration and specializes in (European) crisis management. “The EU has few powers in crisis management. In recent years, member states have also been reluctant to transfer powers in that area to Brussels.”

horror winter

If a horror winter will come soon, the EU will probably not be ready for that, says Boin. And then, he expects, member states will want to give ‘Brussels’ more power. “You always see the same pattern in all these crises. First there is inertia, we will solve it ourselves. Then the member states grow over their heads and they look to Brussels.”

You can already see something of that happening now that the member states have asked Brussels to take more control. On 20 July, the European Commission will present an emergency plan to better coordinate gas shutdowns at European level and to prepare member states for a total shutdown. “We must ensure that in the event of complete disruption, the gas flows to where it is most needed,” President Ursula von der Leyen said this week, referring to the chaos and lack of solidarity at the start of the pandemic.

Whether solidarity will hold up this time remains the big question. Also that of the EU with Ukraine, says Georg Zachmann. His biggest concern: that Europe is ‘not well prepared’ for a gas shortage: will there still be unconditional support from Europe to Kiev?

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