The European Union Agency for Energy Regulators Cooperation (ACER) has issued a warning regarding the ability of EU member states to achieve the mandatory target of filling natural gas storage facilities to 90% capacity before winter. In a recent report, the agency indicated that the bloc's countries may face significant difficulties in reaching this level and may settle for the minimum permitted under challenging market conditions, which is 80%.
Historical background: The energy crisis and storage goals
These goals come in the context of the severe energy crisis that Europe faced following Russia’s invasion of Ukraine in 2012. Before the crisis, Russia was the continent’s main supplier of natural gas, but it drastically reduced supplies via major pipelines, driving energy prices to record highs and threatening European energy security. In response, the European Union adopted a regulation requiring member states to fill their underground storage facilities to ensure sufficient reserves for the winter, with the aim of protecting consumers and industries from price volatility and supply shortages.
Current challenges and high risks
The agency ACER warned that even reaching 80% capacity would not be easy and would likely require significant additional costs. This scenario also exposes the continent to high risks of supply disruptions, especially if the winter is colder than usual or if any unforeseen disruptions occur in the global market. According to data from Gas Infrastructure Europe, storage capacity is currently around 31%, the lowest level for this time of year since 2022, putting further pressure on the pace of filling in the coming months.
Local and international impact
Failure to achieve the 90% target has far-reaching consequences. At the European level, it could reignite concerns about energy price stability, impacting household bills and business competitiveness. Internationally, achieving this target would require the European Union to increase its liquefied natural gas (LNG) imports by an estimated 13% compared to last year. This surge in demand from a major economic bloc like Europe would inevitably intensify competition in the already limited global LNG market, potentially driving up prices for other buyers in Asia and Latin America, and highlighting the interconnectedness of global energy markets and their susceptibility to European geopolitics.
