MNI: EU Likely To Seek Broader Deal On Gas Sharing-Officials

European Union countries are likely to discuss more detailed measures to help energy-vulnerable states such as Germany in the event of a Russian gas shutdown in the autumn, after giving final approval later this week to a new Alert Mechanism allowing for mandatory consumption cuts in an emergency, EU officials said.

“There is an assessment that the July Council was only a warm-up or prelude for more serious talks later in the fall,” said one source close to talks.

EU energy ministers reached political agreement on July 26 on a 15% voluntary reduction in natural gas demand by this winter to boost storage levels. The new regulation also gave EU states powers to trigger a ‘Union Alert' on security of supply, in which case the consumption cuts would become mandatory.

A key unresolved issue is to determine details of a solidarity clause governing how redistribution will be carried out between those with excess gas supplies and needier states. Though France will be wary of being seen to take advantage of Germany’s need for energy solidarity to make progress in other areas, it might be tempted to seek concessions on reform of the EU fiscal rules regime, which will also be the subject of talks from the end of September, or on joint EU borrowing, official said. (MNI: France Seeks Energy Funding For Gas Rationing-Officials)

“Since the Council (i.e. EU states rather than the Commission) got the final say for the alert mechanism, it means a lot of trade-offs in the future,” said an official. “And the Franco-German one is definitely going to be in the works.”

STORAGE SITUATION AHEAD OF WINTER

While some member states already have bilateral solidarity agreements in place under the EU’s Security of Supply Directive, these are few and far between, sources pointed out.

Officials noted that on the day following last week’s energy deal, France felt the need to announce that it would help Germany with gas supplies if required.

Urgent talks among energy ministers are likely to resume in the second half of September and early October as the supply and storage situation becomes clearer ahead of the winter.