Netherlands activates energy crisis plan, removes cap on coal plants

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AMSTERDAM, June 20 (Reuters) - The Netherlands on Monday said it would activate the "early warning" phase of an energy crisis plan and lifted a cap on production by coal-fired power plants as it seeks to reduce reliance on Russian gas in the wake of the war in Ukraine.

The Ukraine conflict has pushed several European countries to seek alternatives to Russian oil and gas. The Netherlands, which imported as much as 15% of its gas from Russia, is already buying LNG and cutting back gas consumption, but still may face a shortage this winter.

"With these measures, less money will flow to Putin's war chest," Dutch Energy Minister Rob Jetten said at a news conference in The Hague to announce the moves.

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Germany's economy ministry has taken similar action to lift caps on coal energy production. read more

The Netherlands' removal of the cap on coal-fired energy production is expected to save 2 billion cubic meters (bcm) of gas use per year.

The country had capped production at 35% of capacity at its coal-fired plants to limit carbon dioxide emissions. Jetten said the Netherlands would still meet 2030 climate goals.

The Dutch government also announced plans to produce 2.8 billion bcm of gas from the Groningen gas field in the year ending October 2023.

That is down from 4.5 bcm in the current production year, but previously the government had indicated close to zero production from Groningen in 2023. read more

The Netherlands has been winding down production at the field for years due to earthquakes it triggers, but has left open the possibility that production could be increased if households were facing a physical shortage.

The "early warning" phase of the country's three-phase crisis plan, alerts users, regulators and governments to a concrete threat of a gas shortage. The plan also includes "alarm" and "emergency" phases, though it remains unclear how industrial users' gas would be rationed in case of physical shortages.

As of Monday, Dutch gas storage facilities were about 48% full. The government announced a subsidy in May to encourage private companies to fill a key storage at Bergermeer. Its reserves have been filling up by several percentage points per week -- not quite quickly enough to meet a target of having them 80% filled before winter.

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Reporting by Toby Sterling and Anthony Deutsch; Editing by David Evans, Alison Williams and Jane Merriman

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