The energy crisis

Russia has resumed pumping gas to Europe through its biggest pipeline after warnings it could curb or halt supplies altogether.

The Nord Stream 1 pipeline restarted following a 10-day maintenance break but at a reduced level.

On Wednesday, the European Commission urged countries to cut gas use by 15% over the next seven months in case Russia switched off Europe's supply.

Russia supplied Europe with 40% of its natural gas last year.

Germany was the continent's largest importer in 2020, but has reduced its dependence on Russian gas from 55% to 35%. Eventually, it wants to stop using gas from Russia altogether.

No faith in Russia, Germany scrambles for energy
Russia's President Vladimir Putin has sought to play down fears, telling reporters that state gas firm Gazprom would fulfil all its contractual obligations.

www.bbc.com/news/world-europe-62249015

Switzerland has developed an emergency plan in the event of an energy crisis if natural gas and electricity supplies run short, the Basler Zeitung newspaper reported this week.

According to the paper, the Swiss government has been working in tandem with industrial companies for several months on the plan.

It includes several steps, ranging from a public awareness campaign with calls for energy saving, such as turning off shop window lights and heaters, to rationing electricity for about 30,000 large energy consumers.

The government also warns of the possibility of power shutdowns in certain areas of the country from four to eight hours a day as a more stringent measure. The plan will be put into action in the event of a shortage of electricity, the head of the Association of Swiss Electricity Companies (VSE), Michael Frank, told the outlet.

“You have to imagine this as a puzzle. Individual segments would be cut off for four hours, then turned back on while others are cut off. Some parts of the network – the pieces of the puzzle – would have no power for four hours, then have power again for four or eight hours depending on the situation,” Frank said.

Another part covers saving gas. Government experts estimate that calls to curb consumption would help reduce gas use by 5%. The plan also offers a transition for businesses to run on oil products instead of gas, where possible. The government estimates these measures could reduce consumption by as much as 20%. Another step suggests limiting the temperature in public buildings and offices.

According to the paper, Switzerland is currently fully provided with electricity. It said that recently concluded annual maintenance work on Russia’s Nord Stream 1 gas pipeline, had not affected the country, as its gas storages had previously been stocked full.

However, according to the report, the prospect of whether the energy saving plan will be implemented depends on whether Russia will continue to supply gas to European customers and in what volumes.

www.rt.com/business/559439-switzerland-energy-saving-plan

Shops in France will be ordered to close doors when using air conditioning and limit neon lighting in a bid to cut energy waste, a minister has said.

These rules, already in place in some areas, will be rolled out across France, Minister of Ecological Transition Agnes Pannier-Runacher told the Journal du Dimanche newspaper.

Energy costs in Europe have spiralled since the Russian invasion of Ukraine.

Shops will be fined up to €750 (£640) for breaking the air-conditioning rule.

Leaving doors open when air conditioning is on is "absurd", Ms Pannier-Runacher told local radio station RMC.

She will issue two decrees on energy waste in the coming days, she told the Journal du Dimanche.

"The first will widen the ban on illuminated advertising, whatever the size of the city, between 01:00 and 06:00," she said.

"The second will ban shops from having their doors open while the air conditioning and heating are working."

The ban on neon signs is already in force in areas with a population under 800,000. Airports and stations are exempt.

Shell has warned energy rationing cannot be ruled out in the EU, as the region struggles to cope with disruption to gas supplies from Russia.

www.bbc.com/news/world-europe-62286924

Last week, unbeknown to many outside the power industry, parts of London came remarkably close to a blackout — even as it was recovering from the hottest day in British history. On July 20, surging electricity demand collided with a bottleneck in the grid, leaving the eastern part of the British capital briefly short of power. Only by paying a record high £9,724.54 (about $11,685) per megawatt hour — more than 5,000% higher than the typical price — did the UK avoid homes and businesses going dark. That was the nosebleed cost to persuade Belgium to crank up aging electricity plants to send energy across the English Channel.

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Now, grid bottlenecks create perverse situations. In Spain, for example, there are times when solar electricity producers in the south have to switch off their plants while, in the north, gas-fired power stations are turning on to meet demand. In some corners of the US, electricity prices often drop below zero, with power plants forced to sell their energy due to grid constraints. Meanwhile, in other corners of the US, consumers are facing calls to reduce power demand on peak days and face record prices.

Aging infrastructure, often 30 or 40 years old, needs to be replaced. But refurbishment and expansion come up against local opposition to more pylons and overhead cables. In the UK, authorities are bypassing popular resistance by moving some parts of the grid offshore, using undersea cables. “Fish don’t vote,” goes the industry’s joke. It is, however, an expensive undertaking.

High metal prices are making building new grids even more costly. Cables are made of copper or aluminum which, at today’s prices, account for nearly a third of what will be spent on a new grid, up 10 percentage points from investments made between 2010 and 2020.

Across the US and Europe, utilities and grid managers need to invest billions of dollars into digitalization of the network to allow demand-side load management that would reduce consumption at peak times, often via hourly prices. Managing peak demand is going to be even more important when millions of households shift to electric vehicles, creating a new source of electricity consumption.

www.bloomberg.com/opinion/articles/2022-07-25/london-s-record-9-724-54-per-megawatt-hour-to-avoid-a-blackout?srnd=premium-uk

Russian energy giant Gazprom says it will once again drastically cut gas supplies to the EU through its main pipeline due to maintenance work.

Gazprom said stopping another turbine at the Nord Stream 1 pipeline would cut daily gas production to 20%, halving the current level of supply.

The German government said there was no technical reason to limit gas supply.

It is likely to make it more difficult for EU countries to replenish their stores of gas before winter.

The Nord Stream 1 pipeline, which pumps gas from Russia to Germany, has been running well below capacity for weeks, and was completely shut down for a 10-day maintenance break earlier this month.

Russia supplied the EU with 40% of its gas last year, and the EU has accused Russia of using energy as a weapon.

www.bbc.com/news/business-62291458

Russian energy major Gazprom will stop the operation of second Siemens turbine, the company announced on Monday. As a result supply through the Nord Stream 1 pipeline will not exceed 33 million cubic meters per day from July 27, business daily Kommersant has reported, corresponding to 20% of the pipeline's capacity.

Gazprom says the decision to switch off the turbine was made based on its technical condition and the fact that it’s due for an overhaul.

A spokesperson for Germany’s Federal Ministry for Economic Affairs has reportedly said that there are no technical reasons to reduce gas supply via the Nord Stream 1 pipeline.

According to an earlier report by Kommersant, several of the nine turbines at the Portovaya compressor station are in need of repair. The paper notes that Gazprom has not yet authorised further repairs, and that one turbine took about three months to overhaul. The current licensing agreement allows Siemens Energy to accept five more turbines for repair before the end of 2024.

This follows a dispute between Russia, Canada and Germany over a Siemens turbine that had been sent to Montreal for repairs and was not returned on time due to Ottawa’s sanctions against Moscow. Gazprom cited the delay as the reason for a 60% reduction in gas flow to Germany last month. Canada eventually sent the part to Germany, where it is currently awaiting shipment to Russia. Gazprom said earlier on Monday that the paperwork it had received from Canada and Siemens regarding the shipment of the turbine did not clear up sanctions-related questions.

Last week, German Chancellor Olaf Scholz suggested that Berlin could no longer rely on Moscow when it came to gas supplies and said he wasn’t convinced by Russia’s statements that the repaired Siemens turbine that had been delayed was necessary for the full functioning of the Nord Stream 1 pipeline. Moscow rejected the claim on Monday, with the Kremlin spokesperson Dmitry Peskov saying that a decrease in the volume of supplies was due to technical problems resulting from Western sanctions.

www.rt.com/business/559618-gazprom-nord-stream-turbine

The European Commission, the executive arm of the EU, on Wednesday presented a strategy on how countries can prepare for the winter period, when their energy needs are much higher.

European countries are being asked to curb their consumption of natural gas by at least 15% until next spring, as part of a wider plan to deal with reduced supplies from Russia.