News item | 24-02-2023 | 17:12
The government wants the gas storage facilities in the Netherlands to be filled to an average of at least 90% again this spring. That is important to be well prepared for next winter. That is why the cabinet is once again announcing a subsidy scheme to fill the Bergermeer gas storage. This is the largest freely accessible gas storage facility in Western Europe.
Last summer, filling the gas storage facilities was not attractive to market parties. In the summer, when the gas storages are usually filled, the gas price was higher than the winter gas price, in contrast to previous years. The extremely high gas price also made the storage of gas financially risky. Although conditions this year are more favorable than last year due to well-stocked storage facilities and lower gas prices, it remains uncertain how the European gas market will develop. That is why the cabinet is once again announcing a regulation for filling the Bergermeer gas storage for this year.
Subsidy scheme
The scheme consists of a guarantee to cover price risks (the difference between summer and winter prices) and a compensation for operational costs (the ‘deduction’). Companies compete with each other when applying. The lower the support requested, the more likely the company is to qualify. To make the scheme sufficiently competitive, the government is offering a subsidy for the storage of 11.8 terawatt hours (TWh) of gas. That is half of the capacity that, in addition to the part that state-owned company EBN fills, is needed to achieve the filling target of 90%.
The costs are estimated at a maximum of 240 million euros. This amount may be lower, depending on the development of the ‘summer-winter spread’ (the difference between summer and winter gas prices). If winter prices are higher than summer prices (a positive spread), just like last year, there are virtually no costs. The intention is that users of the Dutch gas transport network at home and abroad will pay any costs. The government is working out a levy for this.
The scheme is still subject to approval by the European Commission. The aim is for the scheme to start at the end of April at the latest.
Filling Bergermeer by EBN
Just like last year, the cabinet has chosen to apply a combination of measures to fill the Bergermeer gas storage. For example, EBN has been instructed to fill Bergermeer gas storage to 20 TWh insofar as market parties do not do so. EBN was asked to hold about 7 TWh of the gas that EBN already has in the Bergermeer gas storage until the first quarter of 2024. Instead, EBN purchases other gas to meet demand. Some 520.5 million euros has been reserved for this. The actual costs mainly depend on the summer-winter spread.