The plan conceived in Brussels remains in force for each member nation and is set to be fully active by 1 November. By that time, this year and through 2026, gas storages are expected to be filled to at least 80 percent, with some facilities aiming for above 90 percent of capacity. In this framework, the Spanish Government is implementing measures to shield its budget from a potential million-dollar hit as it enforces new requirements for gas companies operating within Spain to stock enough reserves for the coming year.
Last year the executive branch already approved a partial exemption from paying the underground storage usage fee for energy companies meeting new national and European obligations to boost gas reserves. Now the Department of Energy Transition is extending these partial waivers through March 2024 to support the additional gas that must be injected into stores to surpass the target of 90 percent of total capacity.
Current government estimates show that exemptions from these payments have saved gas companies roughly 45 million euros over two years. This amount is ultimately borne by taxpayers via credits integrated into ministry budgets led by Vice President Teresa Ribera.
Since the beginning of the war
At the outset of the conflict in Ukraine, Spain began shaping an anti-Putin shield. By the end of March in the previous year, a month after the military actions began, the government raised the safety stock obligations for gas traders from 20 days to 27.5 days of firm consumption. In June, the European Union approved a regulation mandating all member states to reach 80 percent of their gas storage capacity by 1 November.
The government decided to waive the storage fee for 100 percent of the gas used to reach 27.5 days of consumption and to allow 90 percent of gas to stay above this threshold until the 80 percent mandatory filling is reached, as set by the EU. To bridge the gap created for Enagás, the operator of Spain’s gas system, the Government arranged a 21.6 million euro loan in its budget to support stored gas through 31 March 2023.
The EU-mandated obligation is to fill 90 percent of gas storage capacity by 1 November this year. Direct marketers and consumers that store gas volumes exceeding the current 27.5 days of absolute consumption, or even more than 30 days, will be aligned with that target.
“As a result, for the injection-removal cycle 2023-2024, the cost of the stock liability will exceed the current level, so removing the exemption from the storage fee would not be justified,” the government notes in its latest decree. In response, the Executive extended the royalty exemption through 31 March 2024 and approved an exceptional loan of 23.2 million euros in this year’s budget to support gas storage during the transition period.
Warehouses at 93 percent
Most member states are well above their storage targets. Across the European Union, storage tanks collectively sit around 83 percent full, with the continental average climbing to 95 percent before higher fuel use emerged in milder winters and reduced storage activity. Spain remains among the countries outperforming the broader community average. Three underground Spanish tanks currently hold gas equating to more than 93 percent of their total capacity. Records from Enagás, the operator of the Spanish gas system, show savings exceeding 32,900 gigawatt hours (GWh), updated daily by the operator’s data feed [Citation: Enagás].