Gas prices: Putin ‘going to keep squeezing’ says expert

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Madrid is reportedly not fearing a winter gas crisis as many other EU members who rely on natural gas imports from Russia are. Panic soared after Russia reportedly decreased supplies of gas travelling into Europe through pipelines in the hope to speed up the certification of the new Nord Stream 2 pipeline. But Nord Stream 2, which will transit gas from Russia into Germany, bypassing Poland and Ukraine, had its certification suspended last month.

The move has likely angered Russian President Vladimir Putin, who had been pushing for the approval process to speed up and was accused of orchestrating the gas squeeze over Europe to force this through.

But Spain does not receive pipeline gas from Russia, instead it relies on Algeria for energy.

Spain’s Deputy Prime Minister Nadia Calvino told Bloomberg TV: “In the case of Spain, it is more the North African gas that we are more dependent on.

“Our relationship with Algeria is excellent and so we have a guaranteed supply of gas for the whole of the winter and that should not be a source of concern.”

It also comes as fears of winter blackouts in Europe were prompted by the tighter supplies of gas, lower levels of gas storage and cold months ahead.

Ms Calvino said: “We are not concerned at all about blackouts.

“The supply has been guaranteed very recently again.”

Meanwhile, Germany may be vulnerable to such consequences this winter.

Germany imports around 90 percent of its gas.

Due to data privacy regulations, The Federal Office for Economic Affairs and Export Control (BAFA) stopped publishing import volumes by country in 2016, but 35 percent of Germany’s gas came from Russia in 2015.

In July 2018, an economy ministry spokesperson put Russia’s share in German natural gas imports at “about 40 percent.”

Now Spain is arguing for an overhaul of the EU’s energy market.

Ms Calvino argued: “Our concern has more to do with the way our energy markets are regulated and they work.”

High gas prices are driving up electricity prices as a result of the “marginal” production capacity available to fire up power plants at short notice to meet peak demand.
Spain is one out of a group of EU member states, who argue the EU’s power pricing mechanism is not fair as it does not reflect their own energy mix.

Along with France, Greece, Italy, Romania, Spain signed a paper ahead of talks last week which said that energy prices must “reflect the costs of the generation mix used to serve their consumption”.

The paper said: “We must act in the short term in order to ensure that consumers perceive the benefits of zero-emissions technologies in prices signals while protecting them from the increasing volatility of natural gas markets.”

But Germany pushed back against this demand.

They were part of a group of nine signees of a counter paper that agreed with the EU’s current pricing mechanism.

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The EU’s energy chief Kadri Simson said after a ministerial meeting held in October: “Changing the current model poses risks to market predictability, competitiveness and our clean energy transition.”

The countries who signed the paper in support of Ms Simson’s stance, said: “We agree with the European Commission that in the short term, the price hike can be best addressed through temporary and targeted national actions by member states…to protect vulnerable consumers and businesses.”

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