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The recently approved mechanism for reducing gas consumption across the European Union could stabilize energy prices and maybe even lower them, said the head of Germany's Federal Network Agency, the country's energy industry regulator.
"If all countries in Europe save gas, this can stabilise the price so to speak, maybe even reduce it, and contribute to making sure that there is enough gas supply for us to make it through the autumn and winter," the agency's president, Klaus Mueller said, as quoted by Reuters.
The European Union approved a 15-percent reduction in natural gas consumption across the block, exempting, however, some industries and allowing for a flexible application of the 15-percent target in different countries in accordance with their potential for meeting such a target.
In response, French authorities mandated shops to close their windows if there is an air conditioner working inside, and in Spain the minimum AC temperature was set at 27 degrees celsius for public and office buildings. In Germany, several cities have reduced night-time lighting around monuments and public buildings, and a couple have cut hot water supply.
The cuts come as the European Union rushes to fill its gas storage caverns before winter season rolls around and energy consumption spikes. Storage is filling faster than normal, but the price tag has swollen tenfold, Reuters reported earlier this month.
Normally, storage filling costs the EU some 5 billion euro, or $5.1 billion, but this year, the bill has gone up to 50 billion euro, or $51 billion, because of tight gas markets and intense competition from Asia.
The EU gas consumption cut gained its final approval last week, with every member state but Hungary and Poland voting in favor. Both countries said they had a problem with laws that seek to dictate a member-state's energy mix.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.