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ENERGY

Spain defends MidCat gas link after Macron brush-off

Building a gas pipeline across the Pyrenees mountains is "in Europe's interest" and a project that Spain will vigorously defend despite top-level French opposition, Spain's Energy Minister said Tuesday.

Spanish Energy Minister Teresa Ribera said Macron "doesn't like the idea of a project he sees as being in the past", referring to the older MidCat plans. Photos: Ludovic MARIN, John THYS/AFP

With Russia withholding gas deliveries to most of Europe in reaction to sanctions over its invasion of Ukraine, there has been a resurgence of interest in a link to bring in much-needed supplies from Spain to the rest of the continent.

Plans for such a pipeline, known as MidCat, emerged a decade ago but were dropped in 2019 over regulatory and funding issues.

But Madrid is now pushing hard for the revival of the project with the full backing of Berlin, which has now had Russian gas deliveries via a key pipeline shut off for the indefinite future.

With six terminals, Spain has the biggest infrastructure in Europe to accept liquefied natural gas brought in by ship.

But there is currently only a very small link between the Spanish and French natural gas networks, limiting the possibility for Spain to send supplies onward to central Europe.

The MidCat would boost that capacity, but France has shown little interest in the project.

“There is no obvious need for it, there is no evidence of any need for it today nor in the future,” French President Emmanuel Macron said on Monday after talks with German Chancellor Olaf Scholz.

“I don’t understand why everyone is getting all worked up about (this pipeline) and saying it would resolve the gas crisis: it’s not true,” he told reporters.

“I’m not convinced we need more gas interconnections, which would have a bigger impact on the environment and ecosystems.”

His remarks did little to dampen Spain’s enthusiasm for the pipeline, with Energy Minister Teresa Ribera telling Onda Cero radio it was “in Europe’s interest”.

“There will be a debate, I don’t think we can rule it out solely based on a declaration by one country,” she said.

Although the MidCat pipeline would initially carry gas, Spain says it would ultimately be able to carry green hydrogen — a key energy source for the future.

Spain is hoping improved pipeline connectivity will open the way for it to become the European Union’s new hub for green hydrogen.

In his remarks, Macron raised “environmental concerns” about the pipeline, “which are not without foundation”, he said.

“All the experts are saying it’s wrong to say that a gas pipeline would be able to transport hydrogen in the future, that would have to involve a lot of extra heavy work,” he said.

But Ribera said Macron “doesn’t like the idea of a project he sees as being in the past”, referring to the older MidCat plans.

“In reality, what we’re saying is that if this third gas interconnection is built, it must be a pipeline that’s ready for the future,” she said.

La Vanguardia newspaper didn’t mince its words about the French leader’s “unpleasant” comments.

“Macron does not like the closer friendship between Spain and Germany,” it wrote.

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ENERGY

Reader Question: Why has the price of fuel for log-burners doubled in France?

The cost for one tonne of the wood pellets used to power wood-burners or stoves has doubled since the beginning of 2021.

Question: We have a poêle in our home in south west France and we have noticed that the price of the wood pellets has rocked in recent months – is this an issue all over France? And why?

Although French consumers are largely shielded from the rocketing prices of gas and electricity seen in many European countries, there is one heating method that has not escaped rising costs – wood-burners.

Many French homes have either open fires or log-burners known as poêles, and the most efficient thing to burn in these are specially created wood pellets known as either pellets or granulés de bois

How much do they cost?

On September 20th, Eric Vial, the director of Propellet, the national association of wood pellet heating professionals, told Actu France that the price has almost doubled since last summer.

“Today, a tonne can be bought for about €600. At the beginning of 2021, it would be €300, €350”, Vial told Actu France on September 20th.

The pellets are usually sold in either DIY stories, specialist outlets or hypermarkets and of course the retail prices vary, but in most cases stores have had no choice but to pass the cost increases on to customers.

Why the increase?

Wood pellets have increased in price for several reasons, namely increased demand and higher production costs.

First, demand for wood pellets increased significantly this year. It also came earlier than it normally does, as people began preparing for winter earlier. Many customers placed order before the start of production for 2022.

“The supply is restricted compared to the demand,” explained a spokesperson for Propellet to La Depeche.

The increased demand amid concerns of energy shortages this winter came alongside a general trend of more installations of pellet-burners in France, as installations are supported by the government in an effort to reduce pollution and dependence on fossil fuels. Households can benefit from State aids and subsidies to install new or refurbish old heating systems.

READ MORE: Heating homes: What are the rules on fires and log burners in France?

Between 2020 and 2021, sales of pellet stoves have increased by 41 percent and sales of pellet boilers by 120 percent.

Stores across the country have been forced to limit sales with demand outpacing supply. One such shop is the Weldom store in Fleurance, near Toulouse, who found themselves out of stock in late September. Store owners told La Depeche that they have “a lot of demand at the moment” and if the re-stock delivery “does not arrive, it will be a loss for the store.”

Prices are also rising is due to increased production costs.

According to Propellet, production expenses first increased during the pandemic when plastic and metal elements needed for the creation of pellets were more difficult to find. Currently, the issue facing the industry is the price of electricity. 

Vial explained Actu France that “To manufacture pellets, you need electricity. Because of what is happening in Ukraine, [the price of electricity] has increased a lot.”

According to Christian Lejeune, the manager of the sawmill in Grand-Est, several companies that supply wood pellets are more directly impacted by the war in Ukraine. “They imported their supplies from Ukraine or Belarus,” explained Lejeune to Republicain Lorrain.

Unlike electricity and gas, wood pellets have not fallen under a government price shield to protect consumers from price increases related to inflation. 

READ MORE: LATEST: France to set maximum 15 percent gas and electricity price rises for 2023

Some local politicians, such as the MP for the Ardennes area, Pierre Cordier, have begun pushing for wood pellets to be covered by a price shield, as well as for action to be taken to protect against possible shortages. 

The Minister of Environment, Agnès Pannier-Runacher, responded to Cordier’s requests on September 13th, saying that the government has “taken measures to promote the production of pellet and not be in a supply impasse.” 

The details of such measures were not yet communicated as of September 26th, but according to the Prime Minister’s press conference detailing the extension of the energy shield for electricity and gas, households that use wood-burners will also benefit from the cheque energie, depending on their level of income.

Is there concern about a shortage?

Propellet told La Depeche that “we are not yet in a situation of shortage” instead they are concerned about “temporary strains.”

The association of wood pellet heating professionals expects that the situation will have “smoothed over in the coming months” but this will depend largely on the weather. A colder winter would increase demand.

In the event of a harsh winter, France might need to import wood pellets from other countries, which could prove problematic, as the situation for many other countries is “similar” to France in that there is increased consumer interest in purchasing wood pellets, according to Vial. 

The sector hopes to double its production capacity by 2028, and to distribute an additional one million tonnes between 2021 and 2024. 

On September 22nd, TotalEnergies inaugurated a new pellet bagging and bulk centre.

The plant, which was set up in partnership with the organisation Sea Invest, is intended to boost supplies by increasing the site’s processing capacity from 25,000 metric tons to 50,000 metric tons within three years. Pellets produced will be distributed in a 200 km area around Rouen.

What about firewood?

Consumers have also found themselves paying more for firewood due to a rise in demand – prices have gone up 20 percent since June, according to BFMTV.

When asked about the rising price of wood, the prime minister said that her administration would “look carefully at why wood has a high cost” adding that she believes it “can be produced on our territory.”

“We have forests in France so it will also be interesting to look at whether some people are not taking advantage of the crisis to increase prices,” said Prime Minister Elisabeth Borne.

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