The European Commission has approved a Dutch scheme, worth up to €406.4 million (£345m), to support the filling of the gas storage facility Bergermeer amid Russia’s invasion of Ukraine.
The Netherlands notified the Commission of the scheme, which will enable the country to ensure existing gas storage facilities are filled up to at least 80% of their capacity by 1st November 2022 and comply with the gas storage level obligation under the recently-adopted regulations on gas storage.
To meet the obligation, the Netherlands needs to ensure the partial filling of the Bergermeer facility, which is also used by neighbouring countries.
The Bergermeer facility is different to other storage facilities in the Netherlands, which are used to store Low Calorific gas, historically largely sourced from the Groningen gas field located on the Dutch territory.
For the latter storage facilities, the country had already put in place a filling agreement to ensure an adequate storage level in view of the planned gradual closure of the Groningen gas field.
This measure is therefore only necessary to ensure the partial filling of the Bergermeer storage facility for High Calorific gas.
Under the scheme, the aid will take the form of insurance against negative winter-summer gas price spreads, i.e. when market gas prices are higher in summer when buying and storing gas, compared to the winter when selling it.
The aid will incentivise market participants to fill seasonal gas storages by covering the costs of storing gas during summer for the winter season when the winter-summer gas spreads are too low to cover costs and potential losses incurred in case of negative winter-summer gas price spreads.
If the average spread between winter and summer gas prices is positive and covers the costs of storing the gas for winter, the Dutch Government would not need to provide support.
The aid will be awarded through a tender process in two separate auctions carried out on 30th May and 7th June 2022.
Executive Vice President Margrethe Vestager, in charge of competition policy, said: “This scheme will enable the Netherlands to give companies incentives to store natural gas in the large storage facility Bergermeer, by protecting them from unexpected adverse price developments over the storage period this summer.
“The Commission called for rapidly filling gas storages ahead of the winter and the Netherlands responded with a well-designed scheme that will allow the filling of one of the largest gas storages in Europe and contribute to the Union’s security of supply.”