EU Commission greenlights French support for natural gas storage

France introduced a regulatory mechanism for natural gas storage in December 2017, with the aim of keeping existing storage capacities deemed necessary in operation to ensure the security of gas supply

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The European Commission has approved the French Government’s regulatory mechanism to support the storage of natural gas in the country.

France introduced a regulatory mechanism for natural gas storage in December 2017, with the aim of keeping existing storage capacities deemed necessary in operation to ensure the security of the country’s natural gas supply.

It involves auctioning the storage capacities and covering the costs of the storage operators.

If their revenue is below that set by the French independent energy regulatory authority (CRE), the storage operators receive compensation, which is financed by means of the tariffs for use of the transmission network that are collected by network operators from gas shippers.

However, if the storage operators’ revenue is more than their authorised revenue, they must pay back the surplus through the tariffs for use of the transmission network.

There are currently three storage operators in France – Storengy, Géométhane and Teréga.

Executive Vice President Margrethe Vestager, in charge of competition policy said: “Following an in-depth investigation, the Commission concluded that the regulatory mechanism for the storage of natural gas in France complied with EU rules on state aid.

“In particular, the measure is necessary and proportionate to ensure the security of energy supply to its citizens and businesses, while also guaranteeing that any possible distortions of competition are minimised.”

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