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Germany can make a “painful” move to activate carbon energy Italy and Austria are also considering burning more coal Rising gas prices add to the already rising inflation
FRANKFURT / MILAN, June 20 (Reuters) – Europe’s largest Russian gas buyers struggled to find alternative fuels on Monday and could burn more coal to deal with declining gas flows from the threatening Russia with energy. winter, if the shops are not refilled. Germany, Italy, Austria and the Netherlands have all signaled that coal-fired power stations could help the continent go through a crisis that has pushed up gas prices and added to the challenge. inflation-fighting policies. The Dutch government said on Monday it would remove the production cap on coal-fired power plants and launch the first phase of an energy crisis plan. read more Sign up now for FREE unlimited access to Reuters.com Register Denmark has also launched the first step of a gas contingency plan due to uncertainty in Russian supplies. Italy has moved closer to announcing an energy alert after oil company Eni (ENI.MI) said it had been informed by Russia’s Gazprom (GAZP.MM) that it would only receive part of its gas supply request on Monday. Germany, which also experienced lower Russian flows, announced its latest plan to boost gas storage levels and said it could restart coal-fired power plants it aimed to phase out. “This is painful, but there is an urgent need in this situation to reduce gas consumption,” said Economy Minister Robert Habeck, a member of the Greens who has pushed for a faster exit from coal, which produces more greenhouse gases. “But if we do not, then we run the risk of not having enough storage space at the end of the year towards winter. And then we are politically blackmailed,” he said. Russia on Monday reiterated its previous criticism that Europe blames only itself for Western sanctions in response to Moscow’s invasion of Ukraine, a gas transit route to Europe and a major grain exporter. The Dutch first-month gas contract, the European benchmark, traded around 124 euros ($ 130) per megawatt-hour (MWh) on Monday, below this year’s ceiling of 335 euros, but still more than 300% its level a year ago.
FILLING STOCKS LATE
Markus Krebber, CEO of Germany’s largest electricity producer RWEG (RWEG.DE), said electricity prices could take three to five years to fall again. Russian gas flows to Germany via the Nord Stream 1 pipeline, the main road that feeds Europe’s largest economy, continued to operate at about 40% of capacity on Monday, although they had risen since the beginning of last week. Ukraine has said its pipelines could help fill any supply gaps through Nord Stream 1. Moscow has previously said it could not pump more through pipelines that Ukraine has not already closed. Eni and German utility company Uniper (UN01.DE) were among the European companies that said they received less than conventional volumes of Russian gas, although Europe’s gas reserves are still filling up – albeit more slowly. It was about 54% full on Monday against the European Union target of 80% by October and 90% by November. The German Ministry of Economy said that the restoration of coal-fired power stations could add up to 10 gigawatts of power if gas supplies reach critical levels. A law related to traffic goes to the upper house of parliament on July 8. In addition to the return to coal, the latest German measures include an auction system to encourage industry to consume less gas and financial assistance to the German gas market operator, through the state lender KfW (KFW.UL), to fill the gas storage faster. RWE said Monday it could extend the operation of three 300-megawatt (MW) coal-fired power plants if needed.
RUSSIA UNDERSTANDS THE WEST
The Austrian government agreed with utility company Verbund (VERB.VI) on Sunday to convert a gas-fired power plant to coal in the event of an energy emergency. OMV (OMVV.VI) said on Monday that Austria was going to receive half the amount of gas for a second day. read more The Netherlands will remove the production cap on coal-fired power plants to keep gas in the light of Gazprom’s moves to cut supplies to Europe. Dutch Energy Minister Rob Jetten, who made the announcement on Monday, said the government had also activated the “early warning” phase of a tripartite energy crisis plan. Russia’s state-controlled Gazprom reduced capacity last week along Nord Stream 1, citing the delayed return of equipment served by Germany’s Siemens Energy (SIEGn.DE) to Canada. “We have gas, it is ready to be delivered, but the Europeans must return the equipment, which will have to be repaired according to their obligations,” said Kremlin spokesman Dmitry Peshkov. German and Italian officials said Russia was using it as an excuse to cut supplies. Italy, whose gas technical committee is expected to meet on Tuesday, said it could declare an increased gas alert this week if Russia continues to cut supplies. The move will trigger measures to reduce consumption, including limiting gas for selected industrial users, increasing production at coal-fired power plants and the demand for more gas imports from other suppliers under existing contracts. ($ 1 = 0.9508 euros) Sign up now for FREE unlimited access to Reuters.com Register Additional references by Susanna Twidale in London, Nora Buli in Oslo, Bart Meijer in Amsterdam, Alexandra Schwarz-Goerlich in Vienna. Writes Barbara Lewis. Editing by Edmund Blair, Jan Harvey, Susan Fenton and David Evans Our role models: The Thomson Reuters Trust Principles.
