Italy to compensate gas companies in order to achieve 90% storage fill rate

Italy is introducing a new incentive system for companies to speed up the filling of gas storage facilities. At the end of the winter season, they were only 42% full, according to electricity grid operator Snam. This raises concerns about the country's readiness for the next heating season.

The European Commission has obliged EU countries to fill 90% of their gas reservoirs by 1 November. This is necessary to avoid supply shortages and sharp price fluctuations during the winter months. However, the initiative has caused prices for summer gas contracts to rise. This dynamic in turn means that there is no market incentive for traders to pump fuel into storage facilities. The current situation is also prompting EU countries to negotiate changes to storage fill targets, Reuters notes.

Under the new Italian scheme, gas pumping companies will be compensated for negative differences between summer and winter prices. The scheme will remain in place until a target filling rate of 90% is reached. According to Snam's preliminary estimates, operators will need to pump about 9.4 billion cubic meters of gas to reach that level.