Europe today enters a ten-day period of heightened energy-crisis suspense as Moscow’s real intentions over the Nord Steam I gas pipeline, just closed for annual maintenance, will not be known until July 21, when the subsea pipeline, running from Russia to Germany, is scheduled to reopen.
European leaders are worried the pipeline’s ten-day closure could develop into an indefinite closure, the worst-case scenario. Natural gas prices, as a result, are continuing to escalate.
In France, the country’s power utility EDF will be nationalized to help the company ride out the European energy crisis and invest in atomic plants. In Germany, the emergency effort includes electricity consumption restrictions as well as rescue plans for beleaguered companies, among them the Uniper energy group.
All is possible should the Nord Steam I pipeline not reopen on July 21, from a deep recession in Germany, an intensified energy crisis throughout Europe, company bankruptcies, electricity and natural gas rationing, and further cost-of-living increases.
Two in ten enterprises around Europe are currently battling to stay afloat, according to the European Investment Bank.
Intensifying fears of energy security dangers around Europe next winter are becoming apparent as energy futures continue skyrocketing to unimaginable levels.
Europe is now in a state of heightened alert as the continent’s north, better equipped with greater energy storage facilities, is showing clear signs of serious concern, which was not the case earlier this year, when members of the continent’s south, including Greece, were systematically underlining the dangers ahead at every EU summit.
EU energy ministers have lined up yet another extraordinary Council meeting for July 26 to seek solutions for the Russian-induced gas supply crisis anticipated for next winter.
Highlighting Europe’s growing concerns, French futures for the fourth quarter, the heart of winter, yesterday peaked at 1,000 euros per MWh.
The French government’s announcement of a plan to fully nationalize debt-laden energy giant EDF in order to help it ride out the European energy crisis and invest in atomic plants preceded this latest price surge. Half of EDF’s nuclear reactors are currently sidelined as a result of technical issues.
In Germany, futures for December, 2022 yesterday exceeded 455 euros per MWh, fueled by news that the country’s Ver.di trade union has asked the government to accelerate a rescue plan for the Uniper energy group. The company itself has ascertained that a lump-sum tax plan stands no chance of being imposed, adding that consumers will not be called upon to cover the cost of the energy group’s rescue plan.
In neighboring Austria, moves are being made to secure space at Haidach, one of Europe’s biggest storage facilities, as Russia’s Gazprom has not met rules requiring storage facilities to cover a minimum level.
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.