The European Commision is set to propose a voluntary 15% cut in natural gas use by member states starting next month on concern Russia may halt supplies of the fuel.
The goal would be embedded in a regulation accompanying a demand-reduction plan the European Commission is scheduled to unveil on Wednesday to cope with a potential full cutoff by Moscow. The measure also would include a mandatory trigger if the situation worsens and voluntary curbs are insufficient.
Under its ‘Save gas for a safe winter’ plan, the commission plans to recommend steps that include reducing heating and cooling, as well as market-based measures. As much as 1.5% of the region’s GDP is at risk in the event of a harsh winter, according to a draft commission estimate.
The EU’s biggest challenge this winter is to ensure sufficient gas supplies to fuel furnaces and power generators.
Experts have said that Ireland would not be directly affected in terms of gas shortages should Russia turn off gas, but generators, businesses, and households would still face a further surge in gas prices, possibly by as much as 100% under the worst-case outcome.
Ireland sources the bulk of its gas from the North Sea, and not Russia, via Irish Sea interconnectors with Britain. It also sources about a quarter of all its gas needs from the Corrib gas field off the Mayo coast.
However, Ireland has not been immune from the potential crisis over Russian supplies to much of the continent because gas is a globally traded commodity and prices have soared since the February 24 invasion of Ukraine by Russia.
The commission is working under the assumption that Russia will not resume full deliveries via the Nord Stream 1 pipeline that has been closed since earlier this month for repairs.
Curtailments of Russian shipments have affected 12 member states and prompted Germany to raise its gas-risk alert to the second-highest level last month.
Overall flows from Russia in June were less than 30% of the 2016-2021 average, according to the document.
The planned regulation would grant the commission the right to declare a union-wide alert when there is a substantial risk of a severe supply shortage or a demand spike.
The measure will need approval from member states, which the commission may seek as soon as next week during an emergency meeting of energy ministers.
- Bloomberg. Additional reporting Irish Examiner
