Waste to energy industry associations and paper manufacturers are among the groups urging the EU member states to prioritise businesses producing energy through co-generation if restrictions are imposed on the supply of natural gas in response to reduced deliveries from Russia. "Gas-based cogeneration should be among the last curtailed gas assets for both industrial consumers and district heating," said the industry groups in an open letter. It was sent to EU energy ministers in the run-up to Tuesday's extraordinary Energy Council on the EU Commission’s gas demand reduction plan “Save Gas for a Safe Winter”.
"Cogeneration is uniquely placed to save energy, preserve security of supply, safeguard industrial competitiveness and ensure energy system resiliency. Without cogeneration, keeping homes warm and maintaining critical operation of industry next winter will be significantly more energy intensive, more polluting and costlier," said the letter's signatories. They include the Confederation of European Waste-to-Energy Plants (Cewep); Eswet, the European association representing manufacturers in the field of Waste-to-Energy; and the Confederation of European Paper Industries (CEPI). The remaining signatories were the ceramic industry association Ceram-Unie, the European Association for the Promotion of Cogeneration (Cogen Europe) and the Primary Food Processors association (PFP).
Total system efficiency should be considered
In addition to shielding co-generation plants from gas rationing, European policy makers should avoid discriminatory emergency interventions in the electricity or gas markets and ensure a level playing field between gas-based power-only generation and on-site cogeneration, according to the associations. The industry bodies also argue for the prioritisation of combined heat and power (CHP) generation over less efficient gas-based electricity-only plants and gas boilers. Should it come to rationing or restrictions, the organisations say "gas savings schemes" must not simply count site-level demand reductions. Instead, they should recognise co-generation savings over less efficient gas-based electricity displaced nearby.
The European Commission released its package for gas consumption cuts on 20 July, including proposals to diversify energy supply and promote switches to alternative fuels. Meeting to discuss the package on Tuesday, the energy ministers reached political agreement, endorsing a voluntary 15 per cent target for coordinated reduction in gas consumption proposed by the Commission. Under the Council agreement, a state of EU alert can be declared which would trigger compulsory gas consumption reductions.
Germany's vice chancellor Robert Habeck said that the agreement is "a strong signal to Putin's Russia: Europe will not be divided or blackmailed". Claude Turmes, Luxembourg's energy minister, used similar language, praising the EU's unity and the speed with which an agreement had been reached. "Reducing our gas consumption by 45 bcm is the best move to react to Putin’s gas blackmail," he wrote on Twitter. The French minister of the energy transition, Agnès Pannier-Runacher, said the agreement was a pragmatic plan, adapted to the reality of each member state.
Necessary pragmatism or loopholes?
Those adaptations added by the Council include new exemptions and possible derogations from the mandatory reduction target, which could reduce the scope of the reductions achieved. In announcing the "Save gas for a safe winter" package last week, Commission President Ursula von der Leyen explained that a 15 per cent reduction in demand was the equivalent of 45 bcm (billion cubic meters) of natural gas and had been selected to enable to the EU to come "safely" through the coming winter.
Speaking at the same event, Energy Commissioner Kadri Simson said that while a complete disruption of Russian gas supply would create a supply gap of 30 bcm in an average winter, a colder winter would result in a gap of 45 bcm, and an exceptionally cold winter in an even greater shortage. She warned that if the EU's gas reserves were drawn down all the way, there was no way they could be refilled in time for the subsequent winter.
The Council also voted to shorten the validity period of the Regulation from the two years proposed by the Commission to just one. In May 2023, following a review, the Commission may propose that the measures be extended.
The gas emergency plan has not formally adopted after the meeting of the energy ministers. A written procedure, which is expected to be completed within the next few days, is still necessary according to the Czech EU Council Presidency.