The government is preparing revised discount rates that energy companies will pay for using gas storage tanks. In a moment when these reserves are a critical factor in sustaining Europe during the ongoing war in Ukraine, the European Union is pushing member states to stock more than 90 percent of capacity for the approaching winter to lessen reliance on Russian gas.
A ministerial proposal seeks an average 4.9 percent cut in the charges that operators must pay for injecting, storing, or extracting gas from Spanish underground storage facilities starting October 1 and lasting for twelve months. The proposal is currently undergoing a public hearing process as part of the gas system fees framework.
Officials note that underground storage costs are especially impactful for smaller retailers, who require larger storage capacity relative to their market share. A lower storage cost, they argue, would ease entry for new traders and boost competition within Spain’s natural gas market, according to official documents from the Ministry of Ecological Transition, which is led by Teresa Ribera.
Anti-Putin shield
The European Union aims to secure its energy supply this winter and into the following season by implementing a shield against Moscow. The plan requires member states to steadily fill their gas stocks, with the target set at over 90 percent capacity by November 1 and to maintain that level through the winters until 2026. This approach helps safeguard the energy system against supply disruptions.
The government is already taking steps to simplify compliance with these filling requirements and to mitigate the financial impact on energy accounts. Authorities approved exemptions for underground storage payments until new national and EU obligations to bolster gas reserves are in place. This partial relief applies only through March 2024 for additional gas injected to reach the 90 percent target. For other deposits, energy groups must still pay the current fees, with a planned discount window from October this year to the end of September next year, referred to in industry terms as the gas year 2024. [Source: European Commission guidance, 2023]
The push reflects a broader effort to counter the Kremlin’s energy pressure at dawn. Since the war in Ukraine began, stock obligations for gas traders have risen from 20 days of firm consumption to 27.5 days, and EU rules now require stocks to cover more than 30 days of consumption. This increased precaution aligns with Brussels’ strategy to maintain security of supply across the bloc amid ongoing hostilities. [EU energy policy notes, 2024]
Spanish gas stores are approaching full capacity. More than 33,600 gigawatt hours (GWh) of gas equivalents are currently stored across the three underground tanks, representing roughly 98.8 percent of capacity, according to Enagás, the operator of the Spanish gas system, which reports this data daily. Spain surpassed the 90 percent fill level at the start of May, six months ahead of the mandatory Brussels deadline, and has continued to expand reserves since then. [Market bulletin, 2024]
Load increase
The ministerial order under consideration also proposes a rise in gas system charges, which would push a modest increase in the regulated portion of the gas bill for all Spanish consumers starting October 1 and continuing for twelve months. This adjustment is intended to support next year’s financial plan, including debt repayment for past deficits, payments to the gas market operator, and any supplementary costs in supplying non-peninsula areas. [Policy note: 2024 Update]
Additionally, authorities plan to transfer a total of 11.08 million euros to consumers during the year, with an extra 300,000 euros aimed at supporting millions of customers. The ministry describes the change as a moderate increase with only a very small impact on the final household bill, estimating about a 0.21 percent rise for households and 0.07 percent for large industrial users. [Economic briefing, 2024]