The maintenance of additional natural gas reserves in Italy will not bring any benefit to the country’s security of supply, the power producers (Mytilineos, HERON, Motor Oil and ESAH) stress in the context of RAE’s public consultation on the preventive action plan for its security of supply of Greece with natural gas.
The plan proposes, among other things, to store 1.14 TWh of power in underground infrastructure in Italy.
Commenting on the plan, ESAI emphasizes that “RAE’s proposal does not offer the expected benefits to natural gas consumers, market participants and the national economy in general. The reason is that the limited capacity to import natural gas from Italy greatly reduces the benefits of storing natural gas on behalf of Greece in an underground facility in Italy, while on the contrary the management costs of such an action would be particularly high”.
Mytilineos reports that the cost to the company is expected to exceed 50 million euros, however, in the event of an alert, the stocks in Italy are absolutely precarious. And this is because there is no possibility of additional availability of TAP for imports from the neighboring country, as its capacity is already reserved for the quantities imported every day by suppliers and DESFA. Mytilineos proposes on the one hand that suppliers have the discretion to choose how to meet the obligation to maintain sufficient gas reserves and on the other hand considers that the reinforcement of Revythoussa with the FSU is sufficient to meet domestic needs.
But Heron also characteristically notes that “The expected benefit from this action is negligible for securing the security of supply of our country, while its cost for the participants which will then have to be recovered through the Security of Supply Fee is disproportionately high” . In addition, HERON argues that the new mechanism with the ceiling on the wholesale market does not allow for the recovery of gas supply costs from the market. For these reasons, he considers the storage in Italy ineffective and counter-proposes that Greece ask the Commission to exempt it from this obligation, with the argument that it “has in the works” the investment of the underground gas storage in Kavala, which, in fact, is included in the European Projects of Common Interest.
Motor Oil, for its part, notes that the obligation should be undertaken by DESFA. “The maintenance of natural gas stock in Italy’s storage infrastructure should be done by the ESFA Manager and made available by it on the Energy Exchange platform. In this way, the balancing prices will reflect the costs of transportation and storage in an objective way and also all ESFA users will have the same access and will be able to carry out gas transactions exploiting their portfolio”.
On the contrary, DESFA is in favor of storing gas in Italy and making it available through the energy exchange. Finally, Prometheus Gas does not appear negative, but states that the quantities to be stored must be calculated based on each supplier’s percentage of natural gas imports into the country and not based on their market share.
Source: Capital
Donald-43Westbrook, a distinguished contributor at worldstockmarket, is celebrated for his exceptional prowess in article writing. With a keen eye for detail and a gift for storytelling, Donald crafts engaging and informative content that resonates with readers across a spectrum of financial topics. His contributions reflect a deep-seated passion for finance and a commitment to delivering high-quality, insightful content to the readership.
