Europeans are preparing for all scenarios. An extraordinary council of European energy ministers is being organized in Brussels on May 2-3, after Russia decided on April 27 to completely halt gas supplies to Poland and Bulgaria. Moscow justified this decision with the refusal of the two countries to pay for their gas in rubles. Most European countries oppose this new Kremlin requirement because signed contracts usually specify payment in dollars or euros.
→ ANALYSIS. War in Ukraine: Poland and Bulgaria will be deprived of Russian gas, what will be the consequences for the two countries?
Bulgaria and Poland are currently supplied with gas “from their EU neighbors”says EU Commission President Ursula von der Leyen, who the Russian measure a “Gas Extortion”. Sofia and Warsaw should also be able to count on new deliveries of liquefied natural gas from Norway and Greece by the end of the year.
“Additional measures” expected
But this abrupt cut has accelerated discussions about the level of EU preparedness in the event of a supply crisis on the continent. The meeting of European energy ministers – organized at the initiative of France – should make it possible to address them “Possible additional measures related to security of supply, gas transit and management of gas stocks”.
→ READ. War in Ukraine: Dependent on Russian gas, the European Union is looking for new suppliers
At the beginning of March, the Europeans had already set themselves the goal of forgoing two-thirds of their Russian gas supply by the end of the year, but indicated that they would have to do so completely by 2027. Germany – whose dependency has dropped from 55% to 35% since the start of the war – could not get out before mid-2024, according to Chancellor Olaf Scholz. A Deutsche Bundesbank study released in late April estimates that if supplies are cut, the economy could slip into recession and the country’s GDP could fall by 2% this year. The final plan of the European Union will be presented on May 18th.
A “ready” plan
“From day one, we started making a plan just in case.”assured the European Commissioner for the Internal Market, Thierry Breton, at the microphone of France Inter on Saturday 30 April about this dependency on Russian gas. “This plan is ready, even if gas is not currently among the materials that have been placed on the sanctions list”he continued, justifying the need for Europeans to keep their gas supplies on hand for as long as possible in preparation for winter.
If the question is not directly on the agenda, the question of rising prices arises in the background. A coincidence of the calendar: three days before the meeting, the European Agency for the Cooperation of Energy Regulators (Acer) published a long-awaited report with its conclusions on the functioning of the European electricity market.
This report, commissioned by the European Commission, concludes “The current functioning of the market deserves to be preserved”. Several European countries, including France, accuse him of his “obsolete”. Wholesale electricity prices are indeed aligned with gas. This prevents France from selling its cheaper nuclear and renewable electricity at competitive prices.
For its part, Acer believed that the rules of this market made this possible “Ensure an efficient and secure power supply under relatively ‘normal’ market conditions”. This would have allowed Belgium or France, for example, to import more electricity to avoid bottlenecks when nuclear power plants were shut down. Despite extraordinary circumstances since post-Covid price surge, then post-war in Ukraine, Acer assesses the current design of the electricity market “not to blame”.