BAKU, Azerbaijan, July 21. One way for industrial customers to save gas is to agree in advance contractual swaps of their production from a region exposed to disruptions to a region less exposed in case of large shortage, Trend reports with reference to the European Commission.
“In an “alert” or “EU emergency” crisis level, the producer located in the region less affected by gas shortage would guarantee the supply of the production for the producer that had to be halted due to shortage of gas in the region affected. In turn, such a swap would protect the site and the region affected from unplanned forced curtailment. Such cooperation between undertakings would, in principle, not be considered problematic under the EU competition rules to the extent that it is (i) designed and objectively necessary to address the shortage of gas linked to a declared “alert” or “emergency situation” on one or more European gas markets, (ii) temporary in nature (i.e. only applied as long as the alert or emergency situation persists) and (iii) not exceeding what is strictly necessary to achieve the objective of addressing the shortage of gas linked to a declared ”alert” or emergency situation on one or more European gas markets,” says the Commission.
Reportedly, the use of interruptible contracts for gas consumption, as a voluntary market-based measure, is encouraged wherever possible as it represents an important source of flexibility.
“Such measures are in place at the “early warning” or “alert” level (i.e. preemergency crisis levels) in several Member States. The activation of the interruption comes with a pre-determined financial compensation, corresponding to a pre-determined level of volume reduction or period of disconnection. Although in principle the compensation and volumes are not tailored for a prolonged and complete disruption from Russian gas supply, EU-wide short-term gas demand reductions, triggered by interruptible contracts, can have a significant cumulative impact to free up gas, e.g. for refilling storages. Member States should encourage the increased use of these types of contracts as soon as possible to increase savings already this winter.”