Czech Energy Regulatory Office seeks to toughen gas reserve demands in case of crisis

Photo: European Commission

In the wake of reduced deliveries of Russian gas to Poland, Slovakia and Austria in recent weeks - the EU’s dependence on Russian gas and finding alternative supplies to boost security has shot up the agenda again. And alongside other European countries heavily dependent on Russian gas supplies, the Czech Republic is taking stock of its reserves and preparing for a possible emergency.

Photo: European Commission
An estimated 16 percent of Russian gas destined for Europe flows through Ukraine, Germany gets 40 percent of its gas from Russia; Finland, Lithuania and Bulgaria are 100 percent dependent. The Czech Republic relies on Russia for 75 percent of its gas supplies, having broken its total gas dependence on Gazprom in 1997 thanks to a supply contract with Norway.

Although Czech consumers have been assured by dominant domestic gas supplier RWE that there are sufficient reserves of gas in stock to last through the winter, the country’s Energy Regulatory Office is calling for a change of legislation which will make the country’s energy reserves more transparent. According to current legislation, gas traders must have gas reserves in storage for a 30 day period. Presently, all six of RWE’s underground storage tanks are full, amounting to 40 percent of the country’s annual gas consumption, and Tomáš Prouza, the government’s state secretary for European affairs, recently assured the public that the amount of gas in storage would not last the Czech Republic for a month but for the entire winter.

However the Energy Regulatory Office has not confirmed this optimistic prospect. The office’s director Alena Vitasková points out that some of these reserves may well not be destined for domestic consumption but could be earmarked for other European states such as Germany, Spain or Slovakia.

Under the circumstances the reserves on stock could tide the country over in the event of reduced deliveries, but a worst-case scenario involving a complete cut in Russian gas supplies would present a serious problem. The Energy Regulatory Office is now investigating how much of the reserves in storage are destined for the local market and aims to propose new regulations which would increase emergency reserves destined for the local market from 30 days to the entire winter period. The proposal should be ready by the end of October but the office says it will not be possible to change the rules mid-game and does not expect the new regulation to come into force before the 2015 winter season.

Meanwhile, the threat an energy crisis in Europe is grist to the mill of nuclear power advocates. Speaking at the 2014 Prague Business Forum conference on the future of natural gas supplies to Europe Czech Industry Minister Jan Mládek said the drawn out crisis in Ukraine was a strong argument in favour of the expansion of the country’s nuclear power plants sited at Temelín and Dukovany in order to increase the country’s energy self-sufficiency. The Temelín nuclear power plant currently has nuclear fuel in storage for a year, and minister Mládek said he thought it would be possible to secure nuclear fuel for up to three years in advance. He also warned of the need for Brussels to seek a comprehensive solution to the problem as soon as possible pointing out that countries such as Bulgaria, Bosnia and Herzegovina or Moldova are totally dependent on Russian gas deliveries and do not have adequate storage tanks. The risk of a large-scale humanitarian disaster in this part of Europe is considerable and something we must be prepared to deal with, the minister said.