Czech storage requirement increase postponed to 2016

Czech gas shippers serving socially sensitive customers will not be required to hold 30% of peak gas demand in storage for the upcoming winter season.

The country’s industry and trade ministry and energy regulator ERU said the planned increase from 20% to 30% will be postponed until winter 2016 and the new regulation will be enacted by March 2016.

“The increase will not happen this year but next winter season. We have more to discuss with the relevant parties,” a ministry spokesman said.

The ministry and ERU agreed that the 10 percentage point increase is necessary and cited uncertainties regarding Ukraine’s role as a transit country for Russian gas destined for Europe.

“The consultation process was quite long. We had discussions with the ministry and also had to take market comments into consideration. There was still some disagreement,” an ERU spokesman said.

Neither party could confirm at what stage the revision is or what the next steps will be.

Traders active on the Czech gas market were pleased with the delay as it gives them more time to adjust to the changes. Traders contacted by ICIS agreed that the postponed implementation will have little influence on the gas market this year.

“The market was not prepared anyway. Almost everybody waited for the official release of the law. We are not overbooked [with storage capacity] and I am not aware of anyone who got the extra 10 [percentage points],” one trader active on the hub said.

Another source added that “some were already prepared for the 30% but nothing will change now… The [storage] capacity is all booked now and they will just keep it.”

A final decision on the increase was first planned for 1 July 2015, with the change entering into force by 1 August 2015. The revised public notice that defines the security of supply regulations was last with the committees of the government legislative council.

After the first deadline passed four weeks ago, the ministry said the increase will be an immediate 10 percentage-point jump. But the regulator said back then that an incremental increase will take place.

ERU initially demanded to have the storage requirements fixed into the new energy act to guarantee compliance. Instead, the ministry opted to include the storage requirements in the revised public notice on security of supply to guarantee more long-term flexibility if amendments are necessary in the future. marcello.kolax@icis.com