Filenwes 26 March 2022 - by Chrysanthos Manolis
After many hours of negotiations, which on several points were tumultuous, the EU Summit on energy issues ended around 8.30 p.m. yesterday, with the conclusions - issued with great difficulty, due to disagreements - only partially satisfying the countries of the South.
On the substance, the introduction, here and now, of a maximum price for natural gas, nor the change in the model of the electricity market, as Italy, Spain, Greece and Portugal have insisted on, with the support of other countries, in an attempt to put a stop to the uncontrolled increase in electricity costs and profiteering. To the end, the countries of the North, Germany and the Netherlands, have opposed the request of the countries of the South.
The information before the two-day EU Summit, which wanted the countries of the Union divided into several camps regarding the management of the energy crisis and the control of the... uncontrolled gas and electricity prices were confirmed during yesterday's marathon session, which ended around 8.30 p.m., without a final agreement on the controversial issue of the introduction of a maximum price for natural gas and the change in electricity pricing. In fact, the request by countries of the South and others for the introduction of a maximum price here and now was not approved, but a window was left open for discussion in the coming period. The Prime Minister of Greece, K. Mitsotakis, speaking immediately after the summit, said that "we managed to have an explicit reference to the caps of natural gas prices in the wholesale market. The EU is committed to proposals for the electricity market by May", a statement that does not refer, however, to the introduction of a ceiling but to further discussion of a way of adopting it, i.e. it refers to the conclusions as an option.
Foreign news networks and other media talked about a thriller but also a heated debate, which forced the President of the European Council to differentiate in some cases the suggestion to the leaders, in an attempt to reach a consensus, which in fact seemed to be a reluctant compromise that would not satisfy either side. According to diplomats who spoke to journalists present, the discussions were very intense and had to be interrupted at several points to bring calm to the negotiation.
According to a spokesman for the President of the European Council, the meeting was adjourned in the early afternoon to allow time for governments to study a revised text of conclusions on energy issues. However, the resumption of the debate and its extension showed that finding a compromise was a difficult task, due to the refusal of Germany, in particular, the Netherlands and other countries to accept the ceiling.
The countries of the European South, led by Italy, Spain, Portugal and Greece, acquiescing to some extent the leaders of Belgium, Cyprus (as can be seen from yesterday's statement by Nicos Anastasiades) and other countries insisted on the establishment of price caps for electricity or natural gas or even a change in the structure of the electricity market model, so that high gas prices do not push electricity prices to the heights (even if it is produced at a much lower cost than natural gas, such as RES), allowing super profits from energy producers and suppliers. Kyriakos Mitsotakis was keen on the need to change the electricity market model in his statements after the Summit.
According to foreign media, Germany and the Netherlands have insisted to the end that what is needed is to speed up the development of renewable energy sources, but this does not ensure a reduction in prices, which is the main issue for the European population.
Almost half of LNG will be sent annually to the EU by the US
Almost half of the stockpile of the Aphrodite deposit is what the EU wants to import annually from the US in the coming years, in the form of liquefied natural gas (LNG), in order to become independent of Russian energy as much as possible. Yesterday's agreement between the Union and US President Joe Biden provides in the first phase for the supply of approximately 15 billion cubic meters (bcm) of US liquefied natural gas to EU countries by the end of 2022 and the subsequent gradual increase in the quantity, with the aim of reaching 50 bcm per year.
Commission President Ursula von der Leyen, referring to the US commitment to provide the EU with an additional 15 billion cubic metres of LNG this year, added that "Europe will work to ensure stable demand for additional US LNG by at least 2030. We aim for about 50 billion cubic meters per year."
The announcement issued states that the US will try to secure the additional quantities, a formulation that refers to the difficulties of the project, as the available reserves of American LNG are not many, while in addition there are not in all EU countries the necessary infrastructure available for the regasification of liquefied gas or for its transportation to countries of northeastern Europe.
The EU and the US yesterday reaffirmed their commitment to meet the goals of the Paris Agreement, to achieve the target of net zero emissions by 2050 and to keep the 1.5 degree Celsius limit on rising temperatures achievable, including through a rapid transition to clean energy, renewables and energy efficiency.
Timetable for de-dependence on Russian gas
Germany could halve Russian oil imports by the middle of the year and become independent of Russian gas "to a large extent" by mid-2024, Economy and Climate Policy Minister Robert Habeck said yesterday.
According to him, by the end of this year, the German government's goal is "to be almost independent" of Russian oil, while dependence on coal will be reduced in the coming weeks from 50% to 25%. "By the autumn, independence from Russian hard coal will be possible," he added, noting that "companies let contracts with Russian suppliers expire, don't renew them, and change suppliers at an incredible rate."
The economy minister also expressed confidence that Germany will be "largely" de-dependence on Russian gas by mid-2024 and reiterated the possibility of transporting liquefied natural gas by ships, for which the ministry is preparing three floating terminals. The companies RWE and Uniper are in negotiations for three special ships, he explained. "We are looking at possible sites in the North and Baltic Seas, for use even in view of next winter," the economy ministry said in a statement.
