The outlook for the European Union’s gas market in the coming winter season is positive, according to a new analysis by the think tank Bruegel, published on 10 October. However, it adds, the impact of soaring gas and electricity prices on various industries “calls for a careful and considered response”.
The analysis examines the EU’s preparedness for the coming winter in the light of a number of factors, including the consequences of Russia’s invasion of Ukraine, gas supply challenges and demand reduction measures.
By 2023, the EU will have succeeded in reducing gas demand by 15% compared with historical averages and in increasing its capacity to import liquefied natural gas (LNG). The global LNG market remains well supplied, thanks in part to the limited growth in demand in China. The EU has reached its 90% gas storage target, two months ahead of a deadline in November (see EUROPE 13234/12), and has even sent surplus gas to Ukraine.
“In the worst-case scenario, the EU would end up with storage sites at above 20 percent of capacity by 1 April 2024, while in the eventuality of no Russian imports and gas demand similar to that in 2022, the EU would be well above 40% of storage capacity”, Bruegel reassures.
European countries have also diversified their gas sources, reducing their dependence on Russian gas, and have implemented solutions to increase the production of renewable energy.
Despite these positive developments, the text stresses that the EU must not be complacent. “Fears about gas shortages or power cuts have receded, but a gas price that is persistently higher than in other markets and ongoing price volatility could still have repercussions for the EU industrial structure and economy”, says the analysis.
The document also looks at the specific state of preparedness of different EU regions, such as the Iberian Peninsula and countries dependent on Russian gas pipelines. The overall assessment is optimistic, but the EU is warned to remain vigilant and reactive to developments.
Bruegel concludes that the EU has taken steps to mitigate the impact of gas supply disruptions and price volatility, but continued vigilance and efforts to reduce demand are essential to maintain energy security in the post-war period.
To view the Bruegel analysis: https://aeur.eu/f/94y (Original version in French by Pauline Denys)