Minister Rob Jetten (Economic Affairs and Climate, D66) does not want to fill the gas storage at Bergermeer completely because he is afraid that he will drive up the gas price too much. That’s in a letter which the minister sent to the House of Representatives on Tuesday afternoon. If the Dutch state starts to buy gas en masse, there is a fear that suppliers will charge higher rates.
How a gas storage facility was built under Bergen against the wishes of local residents: Under the ground at Bergen, Russians remain in control of the gas
Bergermeer gas storage is the largest commercial storage depot for gas in northwestern Europe. The storage is in the hands of the Arab Taqa, the Russian Gazprom and Energiebeheer Nederland (EBN), a state shareholding that is a shareholder on behalf of the government. The problem is that the repository is only one-third full. Gazprom has more than 40 percent of the gas storage at Bergen under control, but leaves that pantry empty, which means that gas reserves in the Netherlands are low.
Partly because Russian President Putin has reduced gas supplies to Europe, gas prices are very high. The difference with the future winter price is so small (or even negative) that it is unattractive for market parties to hoard gas now to sell it in the winter.
subsidy scheme
In April, Jetten therefore announced a subsidy scheme of 366 million euros to persuade energy companies and traders to build up gas reserves in Bergermeer. In doing so, the minister is aiming for a filling rate of 68 percent from the start and not for a full filling rate. On Tuesday, Jetten announced that eight companies are participating in the scheme, which ultimately involves 164 million euros.
That is about 200 million euros lower than budgeted. According to Jetten, less subsidy was needed because companies showed great interest in the storage capacity. A subsidy has also not been applied for for the entire available 20 TWh of capacity, as companies believe that due to favorable gas price developments they can fill the storage themselves without being bound by subsidy conditions such as profit skimming and mandatory filling percentages.
In order to achieve the intended 68 percent filling, the state shareholding EBN will be purchasing gas on behalf of the state for the first time. A maximum amount of 257 million euros has been made available for this. However, EBN warned the minister that too much purchasing could influence the price ‘too much’, because this would make EBN’s market behavior ‘too predictable’ and reasonable prices would no longer be charged. Therefore, “it does not now seem responsible to buy more gas” than 11 TWh, comparable to the annual gas consumption of 600,000 households.
gas storage
Gas has been stored in the virtually empty gas field under the municipality of Bergen since 2014. That project, against the wishes of local residents and municipalities, was pushed through because, according to the cabinet, it was of national importance. According to the initiators, the gas storage was necessary to keep the gas price low and to be assured of gas in bad times.
Jetten now acknowledges that gas storage makes only a limited contribution to the security of gas supply in the Netherlands. “Gas storage Bergermeer is largely used by parties that do not supply the Dutch market.” That is why he does not want to impose a filling obligation on the market.
Earlier he rejected the idea of nationalization of the Russian part of the storage. The cabinet looked at whether the ownership of EBN (now 40 percent) could be expanded. But this turned out to be of ‘insufficient added value (…) for filling the storage in the winter of ’22/23’.
Response
GroenLinks believes that the minister should act much harder. Member of Parliament Suzanne Kröger states in a first reaction: “While Germany is taking one crisis after another, our gas storage facilities are still not being filled to the maximum for fear of market disruption and because Gazprom still has a part in its hands. Very worrying and the minister must intervene and look for the legal edges.”