3 charts that show the state of Europe’s energy crisis right now

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Stephen Hall, Writer, Formative Content


  • Russia’s invasion of Ukraine and the subsequent curtailment of gas flows to Europe has pushed international prices to new highs.
  • The EU has managed to fill its gas storage to 90% ahead of winter, according to the International Energy Agency’s quarterly report.
  • Behaviour change and cutbacks may be needed if Russia reduces gas exports further, the agency says.

Russia’s invasion of Ukraine and the subsequent curtailment of gas flows to Europe has pushed international prices to new highs, with market turbulence expected to continue in 2023, according to the International Energy Agency’s (IEA) latest quarterly Gas Market Report. In the US, prices reached their highest summer levels since 2008, the report adds.

The crisis has led to a decline in natural gas consumption across a majority of regions. In OECD Europe, gas demand declined by close to 10% year-on-year in the period from January to August, falling by an estimated 15% in industry due to production cutbacks, according to the report.

Energy crisis causing ‘significant harm to consumers’

The discovery of leaks in the Nord Stream 1 gas pipe in September has limited the supply of gas to Europe further, and a complete shutdown of Russian pipeline flows to the European Union cannot be ruled out in future, the report adds.

“Russia’s invasion of Ukraine and sharp reductions in natural gas supplies to Europe are causing significant harm to consumers, businesses and entire economies – not just in Europe but also in emerging and developing economies,” said Keisuke Sadamori, the IEA’s Director of Energy Markets and Security. “The outlook for gas markets remains clouded, not least because of Russia’s reckless and unpredictable conduct, which has shattered its reputation as a reliable supplier.”

The European Union has been working collectively to strengthen the security of its supply this year, including “further diversifying supply sources, setting minimum underground storage inventory obligations, and co‑ordinating seasonal demand reductions in recent months”. This has meant it has managed to fill its gas storage to 90%, the IEA adds.

Demand for liquefied natural gas is rising fast

Europe’s push to mitigate its reliance on Russian gas has increased demand for liquefied natural gas (LNG). The IEA forecasts that Europe’s LNG imports will increase by over 60 billion cubic metres (bcm) this year. This has led to record high ship rates and a shortage of ships to transport the fuel, according to Bloomberg.

Asia’s LNG imports will remain lower than last year for the remainder of 2022, according to the report.

“However, China’s LNG imports could rise next year under a series of new contracts concluded since the beginning of 2021, while a colder-than-average winter would also result in additional demand from northeast Asia, further adding to market tightness,” the IEA adds.

Behaviour change needed to avoid exacerbating the gas crisis

The IEA says further major adjustments are needed to avoid exacerbating a gas crisis in Europe in the case of lower flows. A 13% demand reduction would be needed in order to keep storage levels above 33% into 2023 if lower flows continue, it says. The analysis indicates that behaviour change alone could reduce gas demand by 15 bcm during the 2022/23 heating season, which equates to over 40% of the required 13% demand reduction.
Looking ahead, the IEA says storage levels will be crucial at the end of the 2022/23 heating season and cold spell preparation should be put in place.

The report explains cold spells are particularly challenging for the gas system due to “the deliverability of storage sites declining with the decreasing level of working gas in stock (due to the lower reservoir pressure). This means that storage sites become less reactive (both in time and volume) to variations in demand by the end of the heating season.”

In the case of a late cold snap, “solidarity, unity and responsible household behaviour will be crucial to ensure supply security”, according to the report.

Comments

  1. It may help to decrease energy crisis and increase electricity.

  2. Amazing and very informative knowledge about energy crisis.

  3. Outstanding knowledge about energy crisis.

Speak your Mind Here

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: