Roof-mounted solar panels to be made compulsory throughout the EU

The EU’s new solar energy strategy, just unveiled, envisions solar panels on all residential roofs throughout Europe as of 2029, according to the REPowerEU plan.

The initiative for compulsory roof-mounted solar panel installations will begin with public and commercial buildings in 2026, followed by private homes in 2029.

As part of the plan, the EU has called for roof-mounted PV licensing procedures to be restricted to no more than three months, as well as for new buildings with specifications enabling solar-panel hosting.

EU member states will need to remove any obstacles preventing further RES expansion, while municipalities with populations of more than 10,000 will need to establish at least one energy community as of 2025. Also, low-income households and persons with special needs will need to be given access to energy communities.

The EU plan for roof-mounted solar panels is expected to add 19 TWh from the first year of development and 58 TWh by 2025.

 

 

 

Russian gas payments by Greek companies due next few days

Greek companies that have imported Russian natural gas supplied by Gazprom and face installment payment deadlines expiring between May 20 and 25 are expected to accept Moscow’s ruble-currency demands as part of a wider EU approach that still remains unclear.

Even so, the European Commission, appearing set to revise EU directives concerning payment procedures by member states for Russian gas, is believed to be adjusting to Moscow’s ruble-currency demands.

Greek companies that have imported Russian gas believe the dispute will soon be resolved and are awaiting EU directives and related signals from the Greek government before proceeding with installment payments, sources informed.

The Greek government and the country’s energy players are continuing to observe emergency plans as energy supply security remains a threat as long as Russia’s war on Ukraine continues.

 

 

Brussels crisis plan presented to EU leaders next week

The European Commission will present a short-term intervention plan for the electricity and natural gas markets at a council meeting of EU leaders next week, the validity of the measures to run through next winter, until May 1, 2023, according to sources.

It remains unclear if this set of measures, intended to subdue exorbitant energy prices, has been finalized or will undergo revisions.

The package is believed to contain new measures as well as older ones that have already been discussed at national and European level.

The plan includes an initiative for the establishment of an EU Energy Platform, whose aim will be to ensure energy supply at fair prices as well as greatly reduced, even eliminated, reliance on Russian natural gas.

EU member states will be given a specific period of time to regulate prices in the retail gas market. Emergency cash-flow measures offering relief to traders will also be made available.

Electricity market measures are expected to include taxation or regulation of excess earnings, energy price regulation in the retail market, as well as price regulation for small and medium-sized enterprises.

 

 

LNG order costs fall as much as 40% below TTF prices

The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.

 

ELPE, Motor Oil decide to cut Russian oil imports

Greece’s two refineries, Hellenic Petroleum (ELPE) and Motor Oil, are moving ahead with plans to replace Russian crude oil imports with orders from alternative sources.

Both energy groups have planned ahead of the EU’s proposal for a ban of all oil imports from Russia by the end of this year, company officials have informed. Reduced reliance on Russian oil imports has been a part of their strategies, whose implementation began last year, the officials added.

Neither energy group has been overexposed to Russian oil imports. Motor Oil’s Russian oil imports, over the years, have represented between 5 to 7 percent of its total oil imports, while ELPE’s Russian oil imports in 2021 reached 18 percent of the group’s total, according to its annual results.

Motor Oil’s deputy managing director Petros Tzannetakis informed a teleconference with analysts last month that the energy group had cut Russian oil imports in the fourth quarter last year.

ELPE’s leadership, which had joined a business delegation accompanying Greek Prime Minister Kyriakos Mitsotakis on a recent official visit to Saudi Arabia, reached an agreement with Aramco for bigger crude oil purchases, presumably to replace Russian oil.

Unclear EU stance on Moscow’s ruble payment demand for gas

The European Commission appears to be deliberately maintaining an unclear stance on Moscow’s demand for natural gas supply payments in the ruble currency, an in-between position that presently enables European companies to abide by Russian President Vladimir Putin’s related decree without breaching EU sanctions imposed on Russia.

Yesterday’s EU council meeting of energy ministers for a common European stance on Russia’s ruble-currency payment demand for Gazprom natural gas failed to produce an agreement, instead maintaining the ambiguity that has hovered in recent weeks.

European Commissioner for Energy Kadri Simson reiterated that payments for Russian natural gas in the ruble currency would represent a violation of European sanctions on Russia, and, as a result would not be accepted. However, she did not offer specific advice on how European companies should make their payments for Russian natural gas when the next round of payments are due. Simson ascertained that clearer directions would soon be issued, without specifying when.

Italian minister for Ecological Transition Roberto Cingolani has allegedly supported that European companies must be given the ability, at least temporarily, to conform to Russia’s payment demands, according to a Politico report.

However, the Italian government has denied that Rome is preparing to make ruble-currency gas payments to Russia, describing the Politico reports as misleading.

 

 

 

REPower EU plan overambitious, ‘an objective, not a specific strategy’

The European Commission’s REPower EU transition plan, aiming to greatly reduce Europe’s reliance on Russian gas, is overambitious and should be regarded as an objective rather than a set of specific measures, officials taking part in the recent annual Gas Infrastructure Europe conference, an authoritative sector event, have concluded.

The calculations offered by the REPower EU plan are incorrect, Torben Brabo, GIE’s president, has told the Euractive agency, adding that a closer look at the figures concerning Russian natural gas supply, LNG supply, as well as biomethane projections, renders the European plan as overambitious.

LNG availability and purchase projections in the REPower EU plan are possibly too high, the GIE president stressed.

Officials linked with LNG infrastructure told the GIE conference that the LNG market’s actual conditions will prevent the EU plan’s lofty targets from being achieved. Anything beyond 50 percent of the target set will be difficult to attain, these officials contended.

American current gas liquefaction capacity does not suffice for supply of an additional 15 bcm of LNG to Europe, as specified in the EU plan, officials taking part in the GIE conference contended.

Qatar and other LNG exporters in the Middle East have already committed amounts to non-EU buyers, while the REPower EU plan’s 35-bcm biomethane objective appears to be too optimistic, they added.

 

 

 

 

Athens awaiting EU outcome for Gazprom payment stance

The Greek government’s stance regarding Moscow’s demands for ruble-currency payments to Gazprom for natural gas supply will depend on decisions to be taken by fellow EU members, government officials have told energypress.

Athens is expected to push for greater clarity on the matter and a common European stance on the issue at an emergency meeting of EU energy ministers called by the French EU presidency for next Monday.

An imminent payment expected to be made by German company Uniper will be pivotal in decisions to be made by EU member states on Moscow’s ruble-currency payment demand for Russian gas supply.

According to German media, Uniper intends to make a euro-currency payment to Gazprom, but, rather than make the payment to a European bank, as the company has done until now, it will instead transfer the related amount to Russia’s Gazprombank, not on the sanctions list.

As has been widely reported, Russian president Vladimir Putin has ordered countries deemed as adversaries to make gas payments through a specific procedure involving two Gazprombank accounts, a foreign-currency account and a ruble-currency account. Gazprombank will convert foreign-currency sums to rubles before transferring the resulting amounts to parent company Gazprom.

All eyes on Germany’s ruble payment stance for Russian gas

Greece and the entire EU are waiting to see if Germany will agree to Russia’s demand for Gazprom gas supply payments in the ruble currency.

Berlin’s next payment to Russia’s state-controlled Gazprom is due tomorrow. To date, Chancellor German chancellor Olaf Scholz has refused to bow to Moscow’s recent payment-term demands.

The decision to be reached by Germany on this dispute with Moscow is expected to serve as a guide for most EU members.

Berlin has officially noted that Russian president Vladimir Putin’s payment demand violates the terms of an agreement signed between the two sides.

Besides creating artificial demand and, subsequently, greater value for the ruble, which has been impacted by sanctions on Russia, Moscow’s demand for natural gas payments in its currency is also seen as a Russian show of strength aiming to force the EU to succumb to Russian demands.

The EU’s refusal, so far, to bow to Russia’s ruble-currency pressure for natural gas payments has contributed to keeping gas prices at high levels.

Greek officials who took part in an energy-security meeting yesterday, called by Prime Minister Kyriakos Mitsotakis, reportedly stated that the EU made a mistake to reject Russia’s ruble payment demand, made in late March.

The ongoing political tension and market turbulence, resulting in higher natural gas prices, is benefitting Russia’s gas revenues.

 

Spain, Portugal price cap agreement to guide Greek plan

Spain and Portugal’s agreement with the European Commission for the implementation of a temporary cap of 50 euros per MWh on reference prices for natural gas and coal used by power plants, effectively detaching wholesale electricity market prices from the cost of these generation sources, promises to serve as a guide for Greece’s negotiations with Brussels for intervention in the country’s wholesale electricity market.

Spain and Portugal had requested a temporary cap on reference prices of 30 euros per MWh, for one year.

The price of electricity in Spain and Portugal will be the same as that applicable for transactions with the rest of the EU, via France, El Pais reported.

The limited capacity of the Iberian Peninsula’s electricity grid interconnections with France will restrict electricity exports from Spain and Portugal. Otherwise, lower electricity prices resulting from the temporary cap would have prompted a sharp rise in electricity exports from Spain and Portugal.

Though the Greek government is on standby for a European price-cap solution to the energy crisis, Athens has already begun regulatory and legislative preparations for domestic market intervention.

PM calls emergency meeting after Russia gas cut to Bulgaria

Prime Minister Kyriakos Mitsotakis will hold an emergency meeting this afternoon at the government headquarters with the energy ministry leadership’s participation following Russia’s decision yesterday to disrupt gas supply to Bulgaria, following a disruption to Poland.

The Greek leader had a telephone discussion with his Bulgarian counterpart Kiril Petkov this morning, pledging Greek energy-supply support, within the framework of EU solidarity, following Russia’s decision to disrupt supply to the neighboring Balkan country.

This support will most likely stem from Greece’s LNG terminal at Revythoussa, the islet just off Athens, through a partial reservation of this facility’s capacity for Bulgaria’s needs.

Consumption in Bulgarian at this time of the year is low, meaning supply through the Revythoussa unit should help cover the neighboring country’s needs, at least temporarily.

Bulgarian-based MET Energy has already ordered a 142,500 m3 LNG shipment through the Revythoussa terminal.

Talks in progress for Italy’s East Med gas pipeline entry

Talks are in progress for Italy’s official entry into the East Med gas pipeline project, a prospective 2,000-km pipeline planned to carry natural gas to Europe via Greece, Cyprus, Israel and Italy, energypress sources have informed.

Greece, Cyprus and Israel signed an agreement for the project’s development in 2020, without Italy’s participation, as the country’s government at the time, citing environmental issues, had reacted against the project reaching its shores.

Italy’s current Prime Minister, Mario Draghi, recently stressed that the East Med gas pipeline needs to be pursued as a result of Russia’s invasion of Ukraine.

The project has now gained political support in Italy, through a resolution issued in parliament urging the government to co-sign the transboundary agreement, energypress sources informed.

Italy has revised its stance on the East Med project as a result of a recent EU-27 decision to drastically reduce Europe’s reliance on Russian natural gas.

Italy could officially announce, in May, its intention to co-sign the East Med agreement, sources informed.

Swift moves for Revythoussa capacity boost, FSU by July 30

Gas grid operator DESFA’s plan to boost the capacity of its LNG terminal on the islet Revythoussa, just off Athens, with the addition of a floating storage unit (FSU), is in full progress, the target date for its mooring being no later than July 30.

DESFA is now preparing to stage a related tender for this plan and, as a first step, is researching the international market to check on the availability of an FSU matching Revythoussa’s requirements, factors including the installation’s period, should a lease solution be chosen, and storage capacity.

RAE, the Regulatory Authority for Energy, is soon expected to decide on whether the FSU should be purchased or leased.

The authority is expected to hold a meeting today with DESFA officials to discuss the plan’s details.

DESFA has indicated it could lease an FSU for a period of between 12 to 18 months and, as part of this plan, would receive the vessel between May 1 and July 30.

The operator is moving fast as the European Commission has requested all EU natural gas storage facilities be filled to 80 percent of capacity by November 1. In addition, the danger of a Russian disruption of gas supply to Europe also requires swift action, as does the higher energy demand anticipated during the summer season.

 

ExxonMobil, like Total, seems disinterested in Cretan blocks

American multinational oil and gas corporation ExxonMobil appears likely to follow the way of France’s TotalEnergies towards a possible withdrawal from two offshore blocks, west and southwest of Crete. The two companies each hold 40 percent stakes in these offshore licenses, Greece’s ELPE maintaining the other 20 percent.

Indications of a reduction in interest by the two corporations run contrary to  growing interest expressed by Greek officials for domestic exploration as a result of the EU’s decision to drastically reduce Europe’s reliance on Russian natural gas.

EDEY, the Greek Hydrocarbon Management Company, recently forwarded letters to these upstream companies, informing them of the Greek government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY officials declined to comment on the retreats by ExxonMobil and TotalEnergies but noted that a new round of talks for upstream investments is beginning. Other corporations are interested in Greece’s upstream sector, EDEY officials informed.

EDEY is determined to keep a tight schedule and secure seismic surveys at the two Cretan offshore areas this coming autumn and in spring, 2023.

Government in frantic search of €3-4bn for crisis measures

The government is frantically searching for solutions that would secure between 3 to 4 billion euros to compensate energy companies for planned price ceilings on wholesale energy prices.

Energy market conditions are adverse across the board. Consumers are struggling to meet costlier energy-bill payments, energy market companies and authorities fear an increase in unpaid receivables and its wider effects, while the government, seeing its approval rating fall by between half and one percentage point a month, is hoping for a European solution to the energy crisis, now exacerbated by Russia’s war on Ukraine.

A European solution to the energy crisis does not seem anywhere near. French president Emmanuel Macron is currently stranded by the French elections, while German chancellor Olaf Scholz appears undecided. For the time being, at least, the Greek government will need to seek a solution through the national budget.

Russian president Vladimir Putin is under no pressure to end his war on Ukraine and stop his energy-sector blackmailing of the EU as long as European energy payments for Russian gas, oil and coal, totaling 600 million dollars a day, keep flowing into Russia.

At this stage, Greek Prime Minister Kyriakos Mitsotakis’ proposal for a price ceiling at the TTF gas exchange appears to be the only promising solution, as this would strike at the root of the problem prompting exorbitant electricity prices around Europe.

Sanctions on Russia boost Greece’s upstream prospects

The EU’s revised natural gas strategy, seeking alternative solutions as a result of sanctions imposed on Russia, has created favorable conditions for Greece’s upstream sector as the Greek market could become a destination for upstream companies operating in Russia and now needing to shift.

EDEY, the Greek Hydrocarbon Management Company, has forwarded letters to upstream companies already maintaining interests in Greece, informing them of the government’s intentions for a renewed, more ambitious hydrocarbon strategy.

EDEY also intends to hold meetings with these upstream companies to determine their levels of interest in the Greek market and shape its actions accordingly.

Total and ExxonMobil maintain hydrocarbon interests in Greece as co-members of a consortium holding two offshore licenses, west and southwest Crete. The two companies each have 40 percent stakes in this consortium, Greece’s ELPE holding the other 20 percent.

The consortium, it is believed, aims to conduct seismic surveys next winter at the offshore Crete licenses, still at early exploratory stages.

Besides these two licenses, a further four licenses have been granted in Greece. Energean maintains an onshore block in the Ioannina area, northwestern Greece. The company also holds a 75 percent stake at Block 2, northwest of Corfu, with ELPE as its partner. Also, ELPE holds two offshore licenses in the west, Block 10 and Ionio.

These six licenses could generate total turnover of 250 billion euros by 2030, assuming a 20 percent success rate during exploration, according to a conservative forecast made by EDEY.

Solar, wind energy facility installation costs up over 30%

Solar and wind energy park installation costs have risen considerably, internationally, since early 2021, driven higher by the pandemic’s impact on the global economy, supply chain and labor,  unfavorable market developments now exacerbated by the impact of Russia’s ongoing war in Ukraine.

According to a new study conducted by LevelTen Energy, monitoring RES sector transactions worldwide, installation costs last year rose by 28.5 percent in North America and by 27.5 percent in Europe, and have continued rising this year, up 9.7 percent and 8.6 percent, respectively, taking the average RES installation cost to 57 euros per MWh.

These unfavorable developments have wiped out RES sector gains achieved over the past decade or so, during which RES installation costs have fallen.

Steel prices in Europe skyrocketed to 1,650 euros per ton in March, up from 1,100 euros per ton last October, and have since eased slightly to levels of around 1,400 euros per ton.

The increased RES costs come as a challenge to the EU’s objective for major RES growth as a means of achieving climate-change targets and drastically reducing Europe’s reliance on natural gas.

Despite these price increases, the cost of RES-based electricity generation still remains far lower than that of fossil fuel-generated electricity.

 

Egyptian grid operator team in Athens for Greek grid link talks

A team of highly ranked officials from the Egyptian Electricity Transmission Company (EETC), headed by president and CEO Sabah Mashali, is in Athens for two days of talks, beginning today, on the development of the Greek-Egyptian grid interconnection.

The EETC officials are scheduled to meet today with a team of Greek power grid operator IPTO officials, headed by president and CEO Manos Manousakis, for a discussion on technical details concerning the grid interconnection.

Tomorrow, the EETC team is scheduled to meet with Greece’s energy minister Kostas Skrekas as well as development and investment minister Adonis Georgiadis.

A first step for the project was taken last October when the Greek and Egyptian energy ministers signed a related Memorandum of Understanding. As part of the agreement, the power grid operators of both countries have assembled a working group to conduct necessary preliminary work.

The group’s responsibilities, according to the MoU, include technical coordination to ensure the grid interconnection’s compatibility; facilitating the project’s licensing matters; as well as providing support for the project’s classification as an EU Project of Common Interest, which would ensure EU funding support.

The Greek-Egyptian grid interconnection is planned to exclusively transmit green energy from Egypt to Greece as a means of increasing the energy-mix share of renewables in Greece and the wider region and also bolstering energy security in Europe, prioritized following Russia’s invasion of Ukraine.

Prime Minister Kyriakos Mitsotakis, during a recent meeting with European Commissioner for Energy Kadri Simson, stressed the importance of the Greek-Egyptian grid link, noting it should receive European backing.

 

Government considering price ceiling on retail electricity

The government is considering to impose a price ceiling on retail electricity, but decisions may depend on the outcome of the next EU summit, scheduled for May 30 and 31.

Even so, the Greek government will be prepared to act alone if EU leaders fail to reach decisions concerning the energy market at the next summit, Prime Minister Kyriakos Mitsotakis pointed at last week’s Delphi Economic Forum.

This would entail further support packages to help consumers meet sharply higher energy costs in the ongoing energy crisis, showing no signs of ending.

It is believed that a sum of between 2 and 4 billion euros will be needed to cover energy subsidies in Greece over the next 12 months. Government sources have yet to specify, but have already described the amount to be required as “considerable”.

Some of the funds could be provided through the Recovery and Resilience Facility.

 

Greece, Cyprus, Israel look to push ahead with key projects

The prospective East Med gas pipeline and a subsea electricity grid interconnection, projects that would link Israel with Cyprus and Greece and which are being heavily promoted as a result of the EU’s new energy policy, aiming to end the continent’s reliance on Russian gas as soon as possible, are expected to dominate the agenda of today’s trilateral meeting in Jerusalem between the energy ministers of Greece, Cyprus and Israel.

Energy company representatives will, for the first time, also be participating in a trilateral meeting of energy ministers involving the three countries, highlighting the determination of all three countries, and the EU, for swift progress on projects and agreements that would contribute to greater energy diversification for Europe.

Greek energy minister Kostas Skrekas will be accompanied by Kostas Xifaras, chief executive of gas company DEPA Commercial; Mathios Rigas, CEO of upstream company Energean; and Manos Manousakis, CEO of Greek power grid operator IPTO.

Representatives of corresponding Cypriot and Israeli companies will also be taking part in today’s trilateral meeting.

Prospects for the development of the EuroAsia electricity grid link promising to connect the three countries have grown considerably as Israel appears to have swept aside previous reservations. Israel has wanted the completion of the Crete-Cyprus link as a prerequisite ahead of further development.

 

 

South Kavala UGS facing delay, war prompts need for cost-benefit update

The final round of privatization fund TAIPED’s tender for a prospective underground natural gas storage facility (UGS) at the almost depleted natural gas field of “South Kavala” in the Aegean Sea’s north appears set for a latter date as authorities believe the project’s cost-benefit analysis needs to be updated as a result of Russia’s war on Ukraine.

TAIPED was aiming to stage the tender’s second round late in May, but officials at the energy ministry and RAE, the Regulatory Authority for Energy, believe the UGS project’s cost-benefit analysis now needs to be updated.

More specifically, at current gas price levels, it would cost 500 million euros to fill the UGS with gas, once its conversion from a depleted gas field has been completed. The conversion’s cost is also estimated at 500 million euros, meaning a total sum of one billion euros would currently be required to develop and fill the facility.

The project’s existing cost-benefit analysis, based on data prior to the war, is now out for consultation. It has already received two extensions.

It remains unknown if a recent European Commission decision requiring EU member states to maintain gas reserves representing 15 percent of annual consumption will be restricted to the war’s duration or become a permanent obligation.

Also, the project’s reexamination will most probably also need to take into account related domestic developments such as a plan for a gas network capacity increase.

 

Updated NECP raises RES capacity target to 25 GW by 2030

The updated National Energy and Climate Plan is expected to increase the country’s RES installation target for 2030 to 25 GW, up from the existing edition’s 18.9 GW.

The NECP’s greater ambition for increased RES installations and a bigger green-energy share of the country’s energy mix is based on the Fit for 55 agreement reached by the EU last April for a carbon emissions reduction of at least 55 percent by 2030, compared to 1990 levels, revised from the previous reduction target of 40 percent.

Given the latest developments concerning Russia’s war on Ukraine, the EU is now determined to achieve even faster RES development to greatly reduce its reliance on Russian gas imports long before 2030.

The Repower EU plan, recently designed for this purpose, is aiming for an average 20 percent increase in new green projects that would cut natural gas consumption by a further 3 bcm. The Repower EU plan has also raised green hydrogen targets.

Greece’s RES units operating in 2020 totaled 10.1 GW, a capacity that will need to be increased by a further 10 GW by 2030, if the Fit for 55 target is to be met. This ambitious target increases the urgency of the energy ministry’s plan for further RES project licensing simplification.

Network upgrades already planned more than cover the country’s ambitious green targets. Power grid operator IPTO estimates that planned transmission network upgrades will enable RES units with a total capacity of 28.5 GW to operate by 2030.

Ongoing war, new EU sanctions on Russia, spark price fears

The ongoing war in Ukraine, as well as a fifth round of EU sanctions against invading Russia, have prompted further energy-shortage fears that could drive natural gas and electricity prices even higher.

A growing number of consumers struggling to cover energy bills are resorting to installment-based payment arrangements, up 60 to 70 percent since the beginning of the year.

One major energy supplier received some 6,000 applications for installment-based payments in March, up from 4,500 in February.

Though the EU has found consensus on imposing sanctions against Russia, it has struggled to reach agreement on support measures for consumers and enterprises. A gap between the EU’s north and south continues to exist, each member state more or less left to seek solutions alone.

None of the south’s proposals, intended to ease the effects of the energy crisis, including a price ceiling on natural gas, and a detachment of gas prices from electricity prices, have yet to be adopted. Instead, decisions have been postponed until May. Decisions could ultimately be shaped by the degree of pressure felt by the north.

The EU’s fifth round of sanctions on Russia, announced yesterday, include a ban on coal imports from Russia, worth four billion euros annually; a total ban of banking transactions with four main Russian banks; as well as export bans for products required by Russia, such as semiconductors. The USA has also increased its pressure on Russia.

Wholesale electricity prices in Greece may be 30 percent lower than a peak of 427 euros per MWh registered in early March, but levels of between 280 and 330 euros per MWh registered in recent days are equivalent to those of November and December.

Even if the war were to end now, the good scenario for energy prices would still be bad. Natural gas prices would remain at levels of between 50 and 60 euros per MWh throughout 2022, compared to yesterday’s level of 106 euros per MWh, for a wholesale electricity price of 160 euros per MWh, up 160 percent compared to last year and 130 percent over 2019 levels.

As for the worst-case scenario, maintenance of natural gas price levels at the present level of 100 euros per MWh would result in wholesale electricity prices of 255 euros per MWh, meaning between 130 and 150 euros in monthly electricity bills for average households, not including subsidies.

 

EU’s Fit for 55 revisions to include reduced gas use

The European Commission is preparing to present, in May, details of its Repower EU program, a strategy aiming to greatly reduce Europe’s reliance on Russian energy. Until now, the plan has been limited to objectives, without specifics on how these targets could be achieved.

Further revisions of the EU’s energy and climate policy – as presented in the recent Fit for 55 package, which set a target of a 55 percent reduction of carbon emissions by 2030, compared to 1990 levels – will be needed, through legislative revisions and directives.

The revisions could include greater tolerance for lignite and gas infrastructure, until recently treated strictly, as well as measures for an acceleration of RES and energy storage development.

As was pointed out at the recent energypress Power & Gas Forum by Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, the EU’s energy policy, concurrently managing economic, energy security and environmental concerns, is now shifting towards greater emphasis on energy security as a result of Russia’s invasion of Ukraine and the move’s wider repercussions.

Even so, the Fit for 55 objectives for 2030 are expected to be maintained, while RES targets may be raised to more ambitious levels.

The EU will also look to reduce natural gas consumption for electricity generation and heating through the use of biomethane quantities in excess of 35 billion cubic meters by 2030, green hydrogen quantities of 20 million tons by 2030, as well as energy storage system development, noted Professor Kapros, one of the architects of the EU’s energy policy.

The EU’s Fit for 55 package had originally planned for 164 bcm of Russian gas imports in 2025 and 131 bcm for 2030, but these quantities are now expected to be greatly reduced to 74 bcm and 33 bcm, respectively.

Europe on edge, tested by Putin’s ruble payment demand

Tension in Europe has risen with signs of disorientation emerging over Russian president Vladimir Putin’s demand for ruble-currency payments to cover Russian natural gas supply.

German chancellor Olaf Scholz, according to Moscow, initially agreed on this payment term for Russian gas supply, but this was swiftly denied by the chancellery.

Italian prime minister Mario Draghi abruptly rejected Putin’s ruble-based payment plan for Russian gas supply, while Polish prime minister Mateusz Morawiecki has called on Europe to impose an embargo on Moscow and follow his country’s example by stopping all Russian energy imports until the end of the year.

Europe is on high alert. Reliance on Russian energy reaches as high as 80 percent in Austria. Germany’s dependence on Russian energy is also high, at 55 percent.

Both countries have taken steps for gas rationing over the payment stand-off with Russia, fearing, like all of Europe, a halt in energy deliveries from Russia because of the dispute over payments.

Robert Habeck, Germany’s federal minister for economic affairs and climate action, has called on citizens to use electricity as moderately as possible.

Should Putin take the dreaded step and cut energy supply to Europe, distribution of existing natural gas reserves, as well as supply from non-Russian sources, will need to be prioritized, with preference for hospitals, power stations and crucial industries, needed to avoid economic collapse.

If European governments are forced to announce a state of emergency, an electricity rationing plan will need to be implemented for all households. The UK was forced to adopt such an extreme measure, for fuel, during the oil crisis in 1973.

In Greece, a halt in Russian natural gas supply would stop economic activity in just a few days. The country’s daily gas consumption reaches approximately 200,000 MWh, of which 115,000 MWh is supplied by Russia.

Additional LNG shipments in April; the mooring of an FSRU at the Revythoussa islet LNG terminal, just off Athens, for a capacity increase; full-capacity generation at the country’s lignite-fired power stations; as well as an agreement with Italy to ensure storage capacity at the neighboring country’s gas storage facilities, for strategic reserves, are all necessary steps ahead of next winter.

It remains to be seen if Russia’s war on Ukraine will carry on into summer and require extreme measures, or end soon, to the relief of all.

The TTF gas exchange ended trade yesterday at 118 euros per MWh. Wholesale electricity prices in Greece today are at 222.38 euros per MWh.

In comments offered during yesterday’s opening day of the two-day Power & Gas Forum staged by energypress, Pantelis Kapros, Professor of Energy Economics at the National Technical University of Athens, estimated that natural gas prices, even if the war were to end now, will average between 50 and 70 euros per MWh this year.

 

 

 

War, energy crisis hastening plans for new LNG facilities

Russia’s war on Ukraine and the energy crisis are precipitating new natural gas and LNG supply solutions, a development that has increased the importance of related projects planned in Greece.

The EU’s decision to drastically reduce the continent’s reliance on Russian gas by two-thirds this year and terminate the dependence prior to 2030 has increased the importance of supply routes not linked to Moscow’s interests.

This development has increased the feasibility of new infrastructure promising to facilitate natural gas and LNG supply to Europe from alternative sources.

A major US-EU agreement established late last week for supply of an additional 15 bcm, at least, of American LNG to the continent this year, and gradual supply increases further ahead in time, has greatly boosted the prospects for related infrastructure.

The EU intends to follow up on this agreement by also establishing further supply deals with other producers, including Qatar and Egypt, in an effort to increase its LNG imports by a total of 50 bcm.

The EU’s new direction, focused on LNG imports, is seen as essential as the deterioration in relations between Europe and Moscow is expected to last many years.

Related projects in Greece promise to serve as LNG gateways for the country as well as southeast and central Europe, while also establishing Greece as a gas hub with an increased geostrategic role.

The Gastrade consortium recently decided to begin planning a second FSRU for Alexandroupoli, northeastern Greece, as an addition to a prospective first unit.

Petroleum group Motor Oil aims to begin development of its “Dioryga Gas” FSRU project, 1.5 km southwest of the company’s refinery in Korinthos, west of Athens, by the end of the year.

Gas grid operator DESFA is preparing to further upgrade its LNG terminal on the islet Revythoussa, just off Athens.

Also, the Mediterranean Gas company is planning to develop an FSRU at Volos port, on the mainland’s east coast. RAE, the Regulatory Authority for Energy, has already issued a license for this project.

In addition, another investor, still undisclosed, is set to begin licensing procedures for yet another FSRU in Greece, sources have informed.

 

 

 

EU falls short of decisive action on energy price de-escalation

An EU-US agreement for supply of an additional 15 bcm of American LNG to the continent this year, as part of a plan envisioning annual supply amounts reaching 50 bcm by 2030, was the most important piece of news to emerge from the Brussels summit on March 24 and 25, along with a decision for joint LNG orders by the EU to producing countries.

Steps taken by the EU for natural gas and electricity price de-escalation were, once again, far from resolute. Though the EU leaders decided on the need for a price ceiling on natural gas, specific decisions were not taken. Instead, the European Commission was called upon to process proposals and present its conclusions by the next summit of EU leaders, scheduled for May.

Consumers in the EU, especially those in the south, more exposed to the energy crisis’ price fluctuations as a result of a lack of energy storage facilities, will, until further notice, need to keep persevering amid the insecurity and threat of escalated prices.

Today’s wholesale electricity price in Greece is 245.56 euros per MWh, up from Friday. Price levels in the short term will depend on how energy markets interpret the announcements following last week’s two-day summit.

 

 

EU states without gas storage must use facilities of fellow members

EU member states without natural gas storage facilities, such as Greece, will be required to store gas quantities representing 15 percent of annual consumption at existing gas storage facilities maintained by fellow member states by November 1, the European Commission has just announced.

In the lead-up, Brussels had issued an order requiring all EU member states with gas storage facilities to fill these at 90 percent of full capacity by November 1, in preparation for next winter. The EU is now taking steps to drastically reduce its reliance on Russian gas.

Governments in respective member states are responsible for the achievement of this objective and can impose fines and sanctions, according to the announcement.

The European Commission has notified it will conduct inspections to determine whether intermediate storage-capacity goals have been achieved. Warnings will be issued if discrepancies are found to be over two percent, followed by related talks with the respective member states. Lack of action a month after these talks have taken place will result in decisions from the European Commission, which the member states in question will need to adopt.

 

Joint EU gas purchases only solution, Brussels points out

The European Commission, in an announcement detailing the cost and effects of various emergency measures considered as remedies for the energy crisis, has singled out joint EU gas purchases that would cover all member states as the only solution that would not prompt side effects.

The announcement was made ahead of today’s summit of EU leaders, expected to examine a variety of measures proposed to tackle the energy crisis. Once conclusions are reached, directives will be issued.

European Commission officials have already concluded that all options come with costs and drawbacks.

Differing energy mixes, market structures and interconnection capabilities of EU member states complicates the task as no single measure would be ideal for all, the European Commission has pointed out in its announcement.

A proposed price ceiling on wholesale electricity prices would require compensation for electricity producers and complicate transboundary energy trade. In addition, this measure would also depend on the fiscal endurance of respective member states.

A price ceiling on gas, or the establishment of lower and upper limits, would need to be implemented throughout Europe to drastically reduce natural gas prices, and by extension, electricity prices, the Brussels announcement noted. Also, an optimal level would need to be set. If the upper limit, for example, is set too low, Europe would have trouble securing bigger gas orders. Also, low price limits would generate higher demand.