EU 'ready' to face challenges expected this winter in energy sector: Jorgensen

The EU is "ready" to face the challenges expected in the energy sector this winter thanks to its gas storage stocks and reduced gas consumption, the EU's new energy commissioner Dan Jorgensen said Dec. 16.

Speaking following a meeting of EU energy ministers in Brussels, Jorgensen said these factors -- together with gas import diversification -- were "positive" signs that the EU would be able to tackle the challenges.

"We are facing a winter that will give us challenges, but we are ready," Jorgensen said.

"The efforts made in previous years means our gas storage is at a level now that -- combined with the fact that we've reduced our consumption of gas and diversified our imports -- means that we can face the winter with a positive assurance that we will handle the challenges that we will face," he said.

EU gas storage sites were filled to a peak of 95.3% of capacity by Oct. 28, according to data from Gas Infrastructure Europe.

However, cold weather and strong gas-for-power demand through November have seen stock levels drop quickly to just 76.2% of capacity as of Dec. 14.

On demand, the European Commission said Dec. 16 that the EU had cut its gas demand by 18% between August 2022 and July 2024 compared with the average of the previous five years, which translates into some 146 Bcm of gas saved.

Jorgensen also reaffirmed his intention to present within 100 days of taking office a roadmap on achieving full independence from Russian energy imports.

Neutrality charge

Winter preparedness was one of the key items on the agenda for the ministers' meeting in Brussels on Dec. 16, along with the need for better coordination at EU level and the impact of Germany's gas storage neutrality charge.

But there was no mention of the charge at the short press conference held by Jorgensen and Hungarian energy minister Csaba Lantos after the energy council.

Germany pledged in May to scrap the controversial charge for cross-border points from January 2025 following widespread condemnation of the charge and its impact on the European gas market.

However, the German parliamentary process for the new amendment to the Energy Industry Act has not yet been completed and there are concerns it may not be passed before the end of year after the collapse of the ruling German coalition.

Speaking earlier Dec. 16, Austria's energy minister Leonore Gewessler said there had been "positive signals" from Germany regarding the removal of the levy on cross-border flows.

But Gewessler said the law needed to be passed, with Vienna set to continue to pressure Germany on the issue.

"We have positive signals and I am confident that we won't need the last resort and legal measures for this," Gewessler said, adding: "This is a very important question for Austria."

Germany introduced the neutrality charge in late 2022 to offset the high costs it incurred from strategic gas storage filling in the summer and autumn of that year.

The charge adds to the cost for countries -- especially those in Central and Eastern Europe -- that take gas via Germany, including imports of LNG from the US and pipeline gas from Norway.

It also made Russian gas imports more competitive as these volumes could reach markets such as Austria, Slovakia and the Czech Republic without passing through Germany.

Austria, Slovakia and the Czech Republic have continued to urge Berlin to pass the necessary legislation to allow for the charge to be abolished at cross-border points.

Infringement proceedings

The European Commission was thought to be considering launching infringement proceedings against Berlin over the charge, which has been described as anti-European and against EU energy solidarity rules.

However, it has yet to be listed in any EC infringement proceedings, with the case said to have been frozen.

German market manager Trading Hub Europe (THE) -- which sets the neutrality charge -- has said it will continue to monitor the legislative process of amending the country's energy law to remove the charge at cross-border points.

The levy is billed monthly as part of the balancing group settlement but is settled under a "month plus two months" schedule.

This means that the balancing group settlement for the month of January, for example, will take place from the end of March.

The charge was initially set at Eur0.59/MWh but was repeatedly increased and reached Eur1.86/MWh in January this year before THE said May 21 it would rise to Eur2.50/MWh from July until December 2024.

THE said last month it would raise the gas neutrality charge to Eur2.99/MWh from Jan. 1, 2025, but would exempt volumes at interconnection points.

It comes as European gas prices trade around Eur40/MWh. Platts, part of S&P Global Commodity Insights, assessed the benchmark Dutch TTF month-ahead price at Eur41.10/MWh on Dec. 13.