ANALYSIS-Filling gas tanks does not solve Europe’s winter energy crisis

ANALYSIS-Filling gas tanks does not solve Europe’s winter energy crisis

BRUSSELS, Aug 31 – The European Union is on track to exceed its targets for filling gas reservoirs, but analysts warn that the most important factor for the bloc’s energy security this winter will be the ability of countries to reduce your consumption enough to ensure that the fuel stored lasts during the colder months.

Following the rush to store gas over the summer, after Europe’s main supplier Russia launched its invasion of Ukraine, Europe’s gas reservoirs are now at 79.94% of capacity, according to data from Gas Infrastructure. Europe, which ensures that countries will exceed their goal of having 80% of their storage full by November.

In a normal year, this could cover the winter peak of gas use in Europe. But in 2022, with Russian flows already severely reduced – the amount of gas it sends through Nord Stream 1, its main pipeline to Europe, is only 20% full – storage will not make up the difference.

According to Aurora Energy Research, total gas storage could sustain European countries, at best, for about three months. In Germany, where nearly a quarter of the EU’s storage is located, stored gas could meet 80-90 days of average demand.

“To deal with this crisis situation, demand reduction will be even more important than storage,” Simone Tagliapietra, a member of the Bruegel think tank, told.

With some 888 terawatt hours (TWh) of gas in storage, EU countries have already surpassed the 858 TWh they had in storage before last winter.

But if countries don’t cut their use of the fuel, Europe’s gas reservoirs will be emptied by March, according to a model from intelligence data firm ICIS shared with our source, even in a scenario where some of Russia’s gas continues to flow. throughout the winter and the weather is not unusually cold.

To avoid a winter supply crisis, each month countries must reduce their gas consumption by 15% below the average of the last five years, according to ICIS. This would leave post-winter storage at 45% if Russia continues to ship gas, and 26% if Russia cuts flows from October.

The combination of the absence of Russian gas and the non-aggressive reduction of gas consumption in companies and buildings “could lead to electricity rationing” this winter, said Mauro Chávez Rodríguez, director of gas analysis for Europe at Wood Mackenzie. .

However, so far there have been no sustained cuts in gas demand on the necessary scale, despite the fact that multiple sectors have been forced to reduce their production due to extraordinary gas prices, a phenomenon that now affects two thirds of of the fertilizer production capacity in Europe.

THE LIGHTS ARE TURNED OFF

EU countries agreed at the end of July to reduce their gas consumption by 15% this winter compared to the average levels in winter between 2017 and 2021. Gas consumption in Europe in the first half of August was 11% lower to the average of the last five years, according to the ICIS.

German industry gas use plunged 21% in July compared to the 2018-21 average, but before that no other month had seen a cut of more than 14%, according to data from the German federal energy regulator.

Unlike most European states, Germany has introduced some requirements to save energy. They take effect next month and include a ban on gas-heating private swimming pools, reduced lighting of public monuments and a ban on heated shops keeping their doors open all day.

Matthias Buck, Europe director at Agora Energiewende, said Germany needs a 20-25% reduction in gas use this winter. This includes reducing household demand, a move he says must be accompanied by more state action to protect low-income households from rising gas and electricity costs.

If gas is not saved this winter, it will be much more difficult to fill the tanks for next winter. If this were to happen and Russia were to cut off flows, next year European storage could run out in November, according to the Oxford Institute for Energy Studies.

Liquefied natural gas (LNG) imports have helped Europe quickly fill up warehouses this year, but in the absence of Russian flows in 2023, the well-supplied LNG market would not be able to bring Europe’s storage facilities back online. comfortable pre-winter levels, which would make it crucial for countries to simply use less gas.

“Storage is the safety net, but a very significant reduction in demand is what we need as a priority in this crisis,” said Matthias Buck.

Melissa Galbraith
Melissa Galbraith is the World News reporter for Globe Live Media. She covers all the major events happening around the World. From Europe to Americas, from Asia to Antarctica, Melissa covers it all. Never miss another Major World Event by bookmarking her author page right here.