Large users would like to get rid of gas in case of non-payment

EconomyJune 19, ’22 8:45 p.m.AuthorsBNR Web Editor and Mirthe Westrik

The threat of gas shortages in our country is rising day by day. The Cabinet had already worked on an emergency plan that included the possibility of forcibly disconnecting large consumers from gas in the event of a major shortage. This is to the great dismay of many companies. Now industry associations of major users are even coming up with a proposal. They argue for a so-called ‘bid ladder’, also known as a tender scheme. In addition, companies can indicate whether and, if so, for what amount they want to turn off how much. The organizations VNCI and VEMW tell BNR.

Tata Steel is one of the largest consumers in the Netherlands
Tata Steel is one of the largest consumers in the Netherlands ANP JEFFREY GREENWEG

‘This is an opportunity that the ministry has overlooked a bit,’ says Hans Grünfeld, director general of the Association for Energy, Environment and Water (VEMW). ‘Forced shutdown’ is a horse remedy that you should try to avoid at almost any cost. By making use of this regulation, the entry into force of the contingency plan can be postponed or avoided. ‘

‘It’s a great way to utilize the low-hanging fruit,’ adds Martijn Broekhoff of the Association of the Dutch Chemical Industry (VNCI). “We do not yet know exactly who can and cannot switch off easily, but there may even be companies that already want to use this bid price ladder. Companies that say they can run a little less for a few weeks or a few months. ‘

The Ministry can use the offer ladder to decide which companies can be cut off from gas temporarily or for a longer period of time in an emergency. Grünfeld says that he has received many signals from companies that want to make use of the scheme, and Broekhoff also says that he hears in conversations with companies. “We think there will be significant interest,” he said.

Leave it to the market

The current plan, the Gas Protection and Recovery Plan, states that the government fully determines which companies are to be closed when gas shortages occur, and in what order, says René Peters, director of gas technology at TNO. ‘VEMW is therefore right to say: Why not let the companies decide for themselves whether they are ready to take out compensation? Adapting to the users is always better, because then companies can also start preparing. And the government will probably have to pay less compensation, win-win for everyone ‘.

Peters also believes that there will be many companies that will bid for this. “Because there are many companies that can not pass on the cost of their energy consumption to their end product. It is primarily the companies that compete in an international market. ‘ The scheme will not be suitable for all companies, explains director Robert Kielstra of the utility company ECW Energy. ‘Large consumers who have significant tasks such as using gas to supply the country with electricity will not be asked to downsize for the time being.’

Small disadvantage

According to Peters, there is a slight drawback to the plan. ‘This means that as a government, you no longer have control over which industries are considered essential for the economy and society, and which are not.’ According to him, this problem can be overcome by first letting the government make a number of demands. ‘For example, food production can be excluded from the scheme. The companies that are not excluded can then start bidding. That way, you leave it largely to the market, but you have some control. ‘

The fertilizer company Yara is one of the largest consumers of gas and is an advocate of the proposed system. Board member Gijsbrecht van Gunter also says the company is ‘essentially’ ready to go up the ladder itself. “We do not want to do it very quickly, but we do not rule it out. It is possible to scale down by a certain percentage for a while. Still, the first question is how exactly the ladder will work and how everything is going at that moment.”

The Ministry’s response

The Ministry of Economic Affairs and the Climate has announced that a ‘savings offer’ is a measure from the Gas Protection and Recovery Plan, even though this measure has not yet been finalized. “We have prepared the measure as much as possible for when the Protection and Recovery Plan is activated, but it is not currently open. Of course, the government monitors daily if necessary, “said a spokesman.

Do not wait, act now

René Peters from TNO emphasizes that now is the time for the ministry to elaborate on the scheme and make a statement. “If you develop such a tender scheme, it will take a few months. You do not have time for that in a real crisis. At the moment, everyone is seeing what is slowly happening. With the war, with Gazprom. It’s getting more serious. You can wait until there really is a crisis, but you want to make such a plan to prevent you from really ending up in that situation. You want that plan ready, so you have to work on it with the sector now. ‘

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