Netherlands should easily meet EU gas storage targets

The Netherlands looks likely to meet this year's gas storage fill targets set by the European Commission without difficulty, having been granted an exemption from the EU-wide 90pc goal.

According to the the Dutch economy ministry, the Netherlands needs to fill only 73pc of its storage capacity by 1 November.

The European Commission had set an EU-wide target of 90pc, but the filling target for each member state is reduced by the amount supplied to third-party countries in 2016-21. And the Netherlands qualifies for this reduction on the grounds of its gas exports to the UK through the BBL pipeline (see table).

The country's start-of-November stocks were well above 73pc in 2022 and 2020, but fell below this threshold, at 61pc, in 2021. But this was largely because Russian state-controlled Gazprom made no use of its contracted space that summer, according to the Dutch economy ministry.

But the ministry still aims to fill at least 90pc of its storage space, also recommended by the country's transmission system operator, GTS.

GTS in November expected difficulties in reaching the 90pc target and prepared measures to help ensure it achieved this goal. These included using storage at a minimum this winter, additional voluntary demand reductions, possible obligatory demand reduction for industry and lowering the start-of-November storage fill target to 80pc of capacity.

And in order to incentivise injections at the high-calorie Bergermeer facility, the Dutch government is considering extending the subsidy scheme to fill the site used last summer, to cover the risk of negative storage spreads. But the TTF summer 2023 market recently has moved back below the winter 2023-24 contract, which might allow Bergermeer's operator, Taqa, sell capacity without using a subsidy programme.

Taqa will hold an auction for 4TWh of capacity at the site on 14 February. The firm sold all 9.25TWh of capacity offered at two auctions in December (see data and download).

And mild weather in October-November and again in January has pared the stockdraw this winter, which makes it increasingly unlikely that stocks will be drawn down to a quarter of capacity at the start of May, the EU's first post-winter interim target. It would take net withdrawals of 649 GWh/d on 19 January-30 April for Dutch inventories to fall to 25pc of capacity on 1 May, well above the three-year average of 127 GWh/d.

But the government plans to completely empty Grijpskerk by the start of April, and much of Dutch injection demand is likely to come at the facility. Following the site's conversion to hold low-calorie gas rather than high-calorie supply earlier this year, Grijpskerk must be cycled at least twice to maximise capacity in future storage cycles.

If combined stocks at Bergermeer, Norg, Grijpskerk and Alkmaar were to be brought down to a quarter of capacity at the start of May, it would require a stockbuild of 351 GWh/d in May-June, July-August and again in September-October to meet the three subsequent filling targets.

This required stockbuild would be well within the three-year average for May-June and July-August. But September-October injections would need to climb above the three-year average of 219 GWh/d. But sites were already well filled ahead of November in 2022 and 2020, reducing the need for strong injections in autumn.

By Oscar Mahony