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UPI: Europe not yet experiencing gas shortages despite cold winter

15-12-2022 |

Changes in the energy mix in Europe suggest the region may have enough supplies on hand to get through a winter amid concerns about the lack of natural gas, analysis from consultancy Wood Mackenzie finds.

Cold weather across much of Europe this week was seen as an ominous warning about the months ahead as the bloc works to diversify an energy sector that was heavily dependent on Russia before the outbreak of war in Ukraine in February.

Wood Mackenzie, part of Verisk Analytics, in an emailed report found heating demand increased in response to the recent cold snap by 20% from November levels, though natural gas usage is down about 16% compared with previous cold spells. Some of that decline in demand could be attributed to gains in renewable energy.

Penny Leake, a European natural gas analyst for Wood Mackenzie, said that overall demand in the European economy is down 10% compared with year-ago levels.

"In 2023, gas demand will continue falling, albeit at a slower rate year-on-year, under normal weather conditions," she said. "Demand in the residential sector will reduce by 12% compared to the five-year average, however, it will be similar to levels in 2022 as this was a relatively warm year."

Leake added that alternative supplies in the form of liquefied natural gas from the likes of the United States and Norway will help ensure Europe does not face shortages anytime soon.

Norwegian energy major Equinor said this week that new production from its Askelaad field will lead to more natural gas for the Hammerfest LNG plant, the only large-scale facility of its kind in Europe.

"This will be supported by accelerated regasification capacity projects that are currently underway and will help Europe's storage levels refill by next summer," Leake said.

The U.S. government, meanwhile, expects Europe's capacity to take in LNG sourced primarily from inland shale basins will increase by about 30% by the end of next year.

European gas storage levels were 87% filled to capacity as of Monday.

Source: UPI