EU Court of Auditors sees gaps in natural gas supply
For the EU Court of Auditors, there are still some uncertainties when it comes to the security of supply of natural gas in the EU.
A yellow sticker identifies a house with a gas connection.
(Image: heise online / anw)
Although the EU has done a lot to prevent Russia from using gas supplies as a weapon, the EU Court of Auditors still sees challenges for a secure supply of natural gas to the EU. These include the growing dependence on imported liquefied natural gas (LNG). At the same time, it is necessary to achieve CO₂ neutrality for part of the gas consumption. Following a special audit, they conclude that the EU must complete the framework conditions for affordable gas.
Overall, the EU Commission has no official definition of "security of supply". According to a special report by the EU Court of Auditors (PDF), gas accounted for around a quarter of gross energy consumption in the EU before Russia's invasion of Ukraine. In the same year, more than 20 percent of electricity in the EU and almost 40 percent of heat was generated from gas. "As the EU imports more than three quarters of its gas, a secure supply is essential to keep the economy going and maintain prosperity."
According to the EU auditors, too little progress is being made on the technology required to achieve CO₂ neutrality through the capture, use and storage of CO₂ (CCUS). This could jeopardize security of supply in the long term. After all, considering the EU's climate targets, it is becoming increasingly important to reduce the CO₂ emissions caused by natural gas. The four CCUS projects currently in commercial operation in the EU could capture a total of 1.5 million tons of CO₂ per year. By 2050, however, it would have to be 450 million tons per year.
New dependencies
The EU has turned away from imports of Russian natural gas rapidly; in 2021, imports from there via pipeline still accounted for 41 percent, in 2023 it was 10 percent. On the other hand, the share of LNG imports increased from 22 to 34 percent. This increases the risk of structurally higher prices and increased volatility in a tight market. In addition to availability, the EU must also pay more attention to affordability.
The move away from Russian gas has led to an affordability crisis in addition to a supply crisis, the Court of Auditors looks back. "In August 2022, wholesale prices for gas peaked at 339 euros per megawatt hour, compared to just 51 euros in August 2021." As a result, the EU countries subsidized gas and electricity prices with around 390 billion euros in 2022 alone. By the end of 2023, the EU had succeeded in becoming less dependent on Russian gas through diversification, gas prices had stabilized and reached pre-crisis levels at the beginning of 2024.
João Leão, the member of the Court of Auditors responsible for the audit, puts a cloud over the sun: "Given its dependence on gas from abroad, the EU will never be able to simply sit back and relax when it comes to security of supply. Consumers also have no guarantee that prices will remain affordable in the event of a major shortage in the future."
Some uncertainties
Leão said this because gas demand in the EU fell by 15 percent during the crisis. However, his auditors had not been able to determine whether this was solely due to the EU's interventions or also to external factors such as high gas prices and a warm winter. Although the gas storage facilities had been filled to more than 90 percent, as prescribed by the EU, this was merely the usual filling level of the storage facilities before the crisis.
Furthermore, the auditors were unable to assess whether the gas price cap was effective, as prices had been significantly lower since the cap was introduced. The EU auditors were also unable to determine whether the new "AggregateEU" platform, which was intended to offer an alternative trading platform for gas trading, had any added value. The crisis-related differences between gas prices in the individual EU countries had already been significantly reduced when AggregateEU was launched.
The EU auditors also criticize the fact that many EU countries are still hesitant to conclude bilateral solidarity agreements for gas supply. Some EU countries were even planning to cut off their gas supplies to a neighbor in an emergency.
In Germany, the gas emergency plan alert level was declared almost exactly two years ago. The Federal Network Agency is responsible for monitoring security of supply, as well as gas storage levels. These must be at 85 percent by October 1; most recently they were at 80 percent. At the end of May this year, the German government adopted a strategy according to which CO₂ may not only be stored offshore in Germany.
(anw)
