Europe rushes to prepare for this winter’s energy crisis

  • Spain could close energy-intensive industries during peak hours
  • France prepares to send gas to Germany in October
  • Germany to sign LNG contracts in UAE
  • Berlin still working on Uniper bailout

BERLIN/LISBON, Sept 19 (Reuters) – Germany pushed for liquefied natural gas contracts with Gulf producers on Monday and other European states outlined measures to save energy as Russian flows were greatly reduced with the approach of winter.

Berlin said it intended to sign LNG contracts in the United Arab Emirates to supply the terminals it is building, now that the vital Nord Stream 1 gas pipeline from Russia is closed, while Spain, France and others described contingency planning to try to avoid power outages. Read more

“If all goes well, the savings in Germany are high and we are a bit lucky with the weather, we … have a chance to winter comfortably,” Economy Minister Robert Habeck said after a visit. of a future LNG terminal. in northern Germany. Read more

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The sharp drop in supplies from Russia, which previously supplied around 40% of the European Union’s gas needs, has left governments scrambling to find alternative energy resources and raised fears of potential blackouts and a recession.

Russia has blamed Western sanctions imposed on Moscow for its invasion of Ukraine for hampering pipeline deliveries. European politicians say Moscow uses energy as a weapon.

German RWE (RWEG.DE) said it was “in good and constructive talks” with Qatar over LNG deliveries, ahead of a planned visit by Chancellor Olaf Scholz to the Gulf. Struggling importer Uniper (UN01.DE) said it had not yet reached a deal.

Germany will also be able to rely on gas from France from around October 10, the head of French energy regulator CRE has said, following an announcement by President Emmanuel Macron that the two would help each other. for energy supply.

While deliveries via Nord Stream 1 have stopped, flows of Russian gas to Europe via Ukraine, although very reduced, have continued.

In France, CRE chief Emmanuelle Wargon said while energy group EDF’s race to fix corrosion-hit nuclear reactors was running into delays, “exceptional” measures this winter could include localized power cuts . Read more

“But there will be no gas cuts for households. Never,” she told the franceinfo channel.

‘DIFFICULT WINTER’

Across the Pyrenees, Spain’s Industry Minister Reyes Maroto said forcing energy-intensive businesses to close during peak consumption was an option this winter if needed.

Businesses would be financially compensated, she said in an interview with Spanish news agency Europa Press, adding that there was no need to impose such closures now.

And Finns have been warned by national grid operator Fingrid that they should prepare for power outages. Read more

Reflecting the disruption caused across the continent, Finnish electricity retailer Karhu Voima Oy said it had filed for bankruptcy due to a sharp rise in electricity prices.

Meanwhile, in Germany, Habeck said Berlin would not let big gas importers like VNG go insolvent, while an economy ministry spokesman said ‘focused’ talks on aid were ongoing with troubled importer Uniper (UN01.DE). Read more

Germany’s economy is already contracting and will likely worsen over the winter months as gas consumption is reduced or rationed, the country’s central bank said on Monday.

In Portugal, the government has been candid about its concerns.

“From one day to the next, we may have a problem, such as not receiving the expected volume of gas,” said Environment and Energy Minister Duarte Cordeiro, adding that Portugal is was striving to diversify its supplies to enhance energy security.

“Portugal has prepared, like all of Europe, for what will be a difficult winter,” he said, urging the European Commission to move forward with plans for a common platform to purchase of gas from the EU and definition of import prices. Read more

NORTH STREAM 1 APPLICATIONS

Russia, which supplied about 40% of the European Union’s gas before its invasion of Ukraine in February, said it shut down Nord Stream 1 because Western sanctions were hampering operations. European politicians say it’s a pretext and accuse Moscow of using the energy as a weapon.

German buyers briefly booked capacity on Monday to receive Russian gas via the Nord Stream 1 pipeline, once one of Europe’s main gas supply routes, for the first time since the line was shut down a year ago. three weeks. But they quickly dropped the requests.

It was not immediately clear why buyers had submitted capacity requests when Russia has given no indication since closing the line that it will restart anytime soon. Read more

Meanwhile, Ukraine accused Russian forces of bombing near the Pivdennukrainsk nuclear power plant in the Mykolaiv region of southern Ukraine. Read more

Since its forces were driven out of Kharkiv, Russia has repeatedly fired on power stations, water infrastructure and other civilian targets in what Ukraine says is retaliation for defeats on the ground. Moscow denies deliberately targeting civilians. Read more

‘GO BACK IN TIME’

European gas storages are now 85.6% full, with stocks in Germany close to 90%, according to data from Gas Infrastructure Europe.

“Inventories should continue to build, supported by the completion of planned maintenance work and increased Norwegian flows from this week,” Energi Danmark analysts said in a morning note.

European thermal coal imports in 2022 could be the highest in at least four years, analysts say.

“Europe is going back in time,” Rodrigo Echeverri, head of research at Noble Resources, told a conference.

Oil prices fell more than 2% on Monday, under pressure from expectations of weaker global demand and the strength of the US dollar ahead of a potentially large interest rate hike, although concerns over the offers have limited the decline. Read more

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Reports from Reuters offices; Written by Ingrid Melander; Editing by Edmund Blair, Mark Heinrich, Hugh Lawson and David Evans

Our standards: The Thomson Reuters Trust Principles.

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