EU gas stocks could fall short next year, Commission president warns

EU finance ministers meeting in Brussels

By Gabriela Baczynska

BRUSSELS (Reuters) -The European Union will struggle to fill its gas storage tanks next summer, the head of its executive warned on Wednesday as she announced measures to boost renewable energy supply but stopped short of backing a price cap that has split opinion across the region.

Adressing the European Parliament, European Commission President Ursula von der Leyen announced plans to accelerate the granting of permits for renewable power projects. She said that the EU will have added 50 gigawatts of renewable power this year and could do more in 2023.

She said the bloc had already increased LNG imports and cut gas consumption to deal with the energy crisis related to the loss of supplies from Russia since its invasion of Ukraine in February.

However, she warned that the EU remains in danger of falling 30 billion cubic metres (bcm) -- about a quarter of the EU's total gas storage capacity -- short of the gas needed next summer to fill storage tanks for the following winter.

Von der Leyen also highlighted decisions to allow more state aid to companies struggling with the energy crunch, as well as the REpowerEU project to help fund the EU's transition away from reliance on Russian fossil fuels.

However, she did not mention of the gas price cap proposal supported by a majority of EU nations but opposed by Germany, the bloc's largest economy, as well as the Netherlands and the European Commission itself.

"The pressure of countries that want it is great and we will be raising it," Czech Finance Minister Zbynek Stanjura said separately in Prague on Wednesday.

"Germany is most against it ... Many in Europe are patiently negotiating with them and trying to change their opinion."

The Commission has so far proposed a market "correction mechanism", which an EU diplomat told Reuters would only limit price spikes, rather than prevent them.

Gas prices hit a record 240 euros per megawatt hour (MWh) last August, compared with 15-20 euros/MWh before the COVID-19 pandemic.

Prices have dropped since that peak as unseasonably mild weather curbs demand, helping Europe to lift current gas storage levels to about 95%.

(Reporting by Gabriela BaczynskaAdditional reporting by Jan Lopatka, Susanna Twidale and Vera EckertEditing by David Goodman)