High prices and heatwave strain have made storing gas increasingly challenging, leaving the Netherlands potentially underprepared for an exceptionally cold winter.
The Netherlands will miss its winter gas-storage target amid market conditions that have made stockpiling gas unprofitable, Dutch state-owned gas infrastructure company Gasunie has warned.
ADVERTISEMENT
ADVERTISEMENT
"Based on the latest developments, the Netherlands will no longer achieve the previously set filling target for this winter (115 TWh) — which is approximately half of the Netherlands’ gas consumption," the company said in a statement.
The 115 TWh national target is higher than the Netherlands’ EU requirement of 74% of storage capacity. The NL Times reported that both targets were now out of reach.
The national targets are based on the gas threshold needed to cope with the harshest winter of the past 30 years. Gasunie said missing it did not automatically mean there would be insufficient gas this winter or that supplies were at risk. However, "without additional policy measures, the Netherlands is insufficiently prepared for a scenario involving one of the harshest winters," said the firm.
Summer gas prices are higher than expected winter prices, making it unprofitable for energy companies to buy gas now and store it for sale during the winter.
European gas prices were trading near €64 per megawatt-hour (MWh) on Wednesday, more than double their level at the beginning of the year. Prices have risen sharply in recent days, fuelled by concerns that the Strait of Hormuz could remain closed into the winter.
On Wednesday, however, reports of progress in Middle East talks eased supply concerns. Risks remain as the blockade of the Strait of Hormuz continues to delay Qatari liquefied natural gas (LNG) shipments.
Referring to the geopolitical situation, the company said, "We are currently assessing how we can maintain the gas supply as robustly as possible in these changed geopolitical and market conditions and prevent unnecessary pressure on the gas market and, consequently, on prices".
Hot weather has added a separate strain, with record summer heatwaves pushing up electricity demand for air conditioning, while the same heat and drought curbed output from hydropower and nuclear plants.
This forced utility providers to burn more gas for power generation and left less gas available to inject into storage during the very months Europe is supposed to be rebuilding stocks for winter.
How full are Dutch gas storage facilities?
Dutch storage facilities were 44.26% full on 23 August, compared with the national target of roughly 80% by 1 November. This was the lowest fill level among the EU countries for which data were available that day.
The Dutch government has authorised state-owned Energie Beheer Nederland (EBN) to store up to 80 TWh of gas when commercial companies fall short. EBN gained access to the Norg storage facility in April.
Gasunie said EBN was carrying out its role properly, but storage was still filling too slowly.
Gasunie said it had previously raised concerns with the Ministry of Climate and Green Growth about the slow filling of Dutch gas storage facilities.
The company said it would continue to monitor developments and keep the ministry informed, but stressed that decisions on further support rested with the government.
"Ultimately, it is up to the Minister to make policy decisions based on the advice received and current developments."
Euronews has contacted the ministry for comment.
