Running out of gas, record energy prices, and power outages.. This is what awaits Europe during the coming winter
The old continent is preparing for a colder than usual winter in light of the continuous escalation of energy prices across the continent, and expectations indicate that the shortage in natural gas supplies may worsen, and it may reach the decline of stocks to zero, with the possibility of power outages in all regions of Europe.
In a report published by “Oil Price” (Oil PriceThe American, Tsvetana Paraskova, says that with the start of a drop in temperatures in Europe in recent days, electricity prices have risen, at a time when analysts expect that there is no immediate solution to the crisis of electricity and natural gas supplies, and that the situation will be worse if the cold wave continues.
Europe is looking for solutions
For now, some experts are of the view that the only thing that can ease pressure on limited energy supplies in Europe is a reduction in demand in industries with fears of stocks running to zero.
According to the writer, Russia has so far fulfilled its contractual obligations with European customers regarding pipeline natural gas supplies, but it has not provided additional supplies in the midst of the gas and energy crisis in recent months.
Earlier this month, Germany’s Federal Network Agency said Russia’s Nord Stream 2 project had stalled after Germany confirmed it had suspended certification of the gas pipeline.
In light of the uncertainty surrounding the start of the Nord Stream 2 project, gas and energy prices in Europe could exceed the record levels they reached last October.
“I wouldn’t rule out a return to record highs last October when I look at the severe market shortage and limited Russian inflows,” Wayne Bryan, an analyst at Refinitiv Consulting, told Reuters last week.
“If it’s cold in Europe, there is no easy solution to increasing supply, but rather a solution to reduce demand,” Hartree Partners trading partner Adam Lewis told Bloomberg.
Some energy-intensive industries that use a lot of natural gas – including ammonia, fertilizers and steel plants – have scaled back their operations in Europe in recent months, as they have faced losses due to record natural gas prices, and if they continue to scale back operations in the coming months, demand On energy will decrease.
Trafigura CEO Jeremy Ware said the natural gas crisis for consumers meant power outages, warning that “there is not enough gas at the moment, quite frankly we are not stockpiling for the winter.” Ware added that the real concern was It lies not in the winter cold, but in the possibility of power outages.
low wind power
The writer adds that in addition to the natural gas crisis that raised energy prices in Europe to record levels, the decline in wind speed has in turn exacerbated the energy supply deficit, especially in northern European countries that depend on wind power generation in part.
For example, a decline in wind power in France coupled with a decline in nuclear power supplies drove the country’s electricity prices last week to their highest level in nearly a decade, along with rising demand for electricity in cold weather.
Energy prices in the northern countries of the continent jumped on Monday to a record level due to the drop in temperatures, the decline in energy supplies from renewable energy sources, and the rise in gas prices.
With scarce natural gas supplies, and uncertainty about the possibility of increasing Russian gas flows, the writer believes that energy and gas systems and markets in Europe are facing a very difficult challenge during the current winter.