At the beginning of the year, the president of the European Commission, Ursula von der Leyen, proudly announced, that for two consecutive years, Europe survived the energy crisis. However, the end of the year will be quite the opposite.
The reservations. For three years, the European Union has emptied its gas storage facilities more quickly than in previous years due to the energy crisis. The reason is due to several factors, such as increased demand caused by a colder climate, dependence on underground deposits, decreased imports of liquefied natural gas and greater competition.
Thus, the volume of gas in the block’s storage locations has decreased by approximately 19% since the end of September, when the refilling season in gas markets ends, until mid-December, according to data from Gas Infrastructure Europe.
In the previous two years, and as expressed by the president of the European Commission, storage remained relatively full well into the winter season due to high temperatures.
When it all started. When the war broke out, Europe threw up its hands, since 40% of the gas came from Russia. This dependence forced some countries to align with the Kremlin’s decisions, as was the case of Slovakia, Hungary and Austria at that time. Furthermore, the situation has led to different proposals by Russia to avoid sanctions and maintain the distribution of its gas.
The problems add up. Europe has also faced increased competition for LNG imports from Asia, where buyers have been attracted by lower prices than in recent years. This has caused a slowdown in imports and the need to draw more on stored reserves.
Added to this is the climatic phenomenon known as ‘Dunkelflaute’ and an aging electrical grid, which have been decisive for an increase in the use of reserves. On the one hand, ‘Dunkelflaute’ occurs in winter and in periods of low energy production due to lack of wind and sun. On the other hand, 40% of electricity networks in Europe are more than 40 years old, which generates system failures. This situation has caused fluctuations in the Price of electricity.
But there is more. Reservations at the beginning of November have to be 90% in compliance with the mandatory regulations of the European Commission. However, an important part of the supplies come in the form of LNG and this is where the United States comes in, which is one of the largest suppliers to the EU. However, the picture will change due to threats from President-elect Donald Trump, who has warned that European countries must commit to buying “large-scale” quantities of oil and gas, or face tariffs.
Along those same lines, Qatar has threatened to stop LNG shipments if member states strictly apply the new legislation. These regulations penalize companies that do not comply with the established criteria regarding carbon emissions, labor rights and human rights.
Has it happened before? The last time gas reservoirs were emptied at such a rapid rate was in mid-December 2021, when Russia began cutting gas supplies through pipelines.
Currently, EU gas storage levels are at 75%, slightly higher than the average of the last ten years, before sanctions on Russian imports. However, emptying storage facilities during the winter can make replenishing reserves for next year more complicated and expensive. Despite these challenges, Europe has the opportunity to explore other alternatives to reduce its dependence on conventional natural gas and this opens the door to the development of biomethane.
Image | Brian Cantoni and Unsplash
WorldOfSoftware | The ace up Spain’s sleeve to grow even more in the renewable energy landscape: biomethane
