Europe is racing to prepare for an energy crisis this winter

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  • Spain may close energy-intensive industries during peak hours
  • France is preparing to send gas to Germany in October
  • Berlin still working on rescue operation Uniper

PARIS/MADRID/BERLIN, Sept. 19 (Reuters) – European governments on Monday outlined new measures to cope with potential energy shortages this winter and rushed to upgrade energy networks to share power, while Russian gas flows continued to decline sharply. Tariffs run in Ukraine war.

Spain made plans that could force energy-intensive industries to shut down at peak times, France said it was preparing to send gas to Germany from October, while Berlin said Europe’s superpower was still in talks over state aid for ailing utility company Uniper. . read more

German buyers briefly reserved capacity on Monday to receive Russian gas through the Nord Stream 1 pipeline, once one of Europe’s main gas supply routes, for the first time since the line was closed three weeks ago. But they soon dropped the requests.

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It wasn’t immediately clear why buyers had made capacity requests, while Russia has given no indication since closing the line that it would restart soon. read more

Russia, which supplied about 40% of the European Union’s gas before the February invasion of Ukraine, has said it closed the pipeline because Western sanctions hampered operations. European politicians say this is a pretext and accuse Moscow of using energy as a weapon.

European gas prices have more than doubled since the beginning of the year due to a fall in Russian stocks.

While Russian gas flows to Europe via Ukraine have declined sharply, they have continued.

But the sharp decline in Russian fuel exports, in retaliation for Western sanctions following Moscow’s invasion of Moscow, has left governments struggling to find energy sources, as well as to warn that power outages could happen for fear of a recession.

Germany’s economy is already shrinking and is likely to worsen during the winter months if gas consumption is reduced or rationed, the country’s central bank said Monday. It added that the economy would likely contract even if outright rationing is avoided as companies reduce or halt production.

In France, natural gas exports to Germany could begin around October 10, the head of France’s CRE energy regulator said, following an announcement by President Emmanuel Macron that the two EU neighbors would help each other with electricity and gas flows during the crisis.

“Gas (until now) only flowed from Germany to France, so we didn’t have the technical tools to reverse the flows and we didn’t even have a method to regulate prices,” CRE chief Emmanuelle Wargon told franceinfo radio .

‘NEVER’

While French energy group EDF is in a rush to repair corrosion-stricken nuclear reactors, “exceptional” measures could include local power cuts this winter if winter is cold and EDF’s plans are delayed, Wargon said. read more

“But there will be no gas cuts for households. Never,” she said.

Spain’s Industry Minister Reyes Maroto said requiring energy-intensive businesses to close during consumption peaks this winter is an option on the table if necessary.

The companies would be financially compensated, she said in an interview with Spain’s Europa Press news agency, adding that there is now no need to impose such closures.

And Finns were warned to be prepared for power outages. read more

“Due to major uncertainties, Finns must be prepared for power outages due to a possible power shortage in the coming winter,” says national grid operator Fingrid.

Reflecting the disruptions caused across the continent, Finnish energy supplier Karhu Voima Oy said it had filed for bankruptcy due to a surge in electricity price increases.

‘BACK IN TIME’

European thermal coal imports in 2022 could be the highest in at least four years and could rise further next year, analysts said Monday, highlighting the magnitude of the energy crisis following sanctions against top supplier Russia.

According to Noble Resources International Pte Ltd, European thermal coal imports could rise to around 100 million tonnes this year, the highest since 2017, while the commodity price agency Argus expects shipments to reach a four-year high.

“Europe is going back in time,” Rodrigo Echeverri, head of research at Noble, told a conference.

Meanwhile, oil prices fell more than 1% on Monday, pressured by expectations of weaker global demand and the strength of the US dollar ahead of a potentially large rate hike, although supply concerns limited the decline. read more

Oil has also come under pressure from forecasts of weaker demand, such as the International Energy Agency’s forecast last week that demand will be zero in the fourth quarter. read more

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Reporting by Reuters agencies; Writing by Ingrid Melander; Editing by Edmund Blair and Mark Heinrich

Our Standards: The Thomson Reuters Trust Principles.

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