Europe does not get the accounts without Russian gas: it will have to face cuts so as not to run out of reserves

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Europe’s time is over if Russia decides to completely cut off the gas supply. According to calculations by think tank Brueguel, the European Union as a whole will have to adjust gas demand by 15% over the next ten months to compensate for this situation and not run out of reserves. “The substitution of Russian gas for LNG has largely reached its limit”, comment the energy specialists Georg Zachman and Ben McWilliams of the institution, and recommend that the coordination efforts of European countries focus on minimizing the impact, which involves adapting demand to available gas stocks.

Falling imports from Russia can now only be met by reducing EU gas demand. European Union demand reduction faces Russian gas cuts, posted on the website of the Belgian think tank. To put it in money, the EU as a whole will have to desperately reduce its gas consumption if it does not want to run out of storage.

And there are two ways to achieve this, voluntarily or involuntarily. The first may be caused by an economic crisis, the clouds of recession for Europe are getting closer, but it will be insufficient to reach the level expected by experts. According to Eurostat gas consumption data, during the 2008 financial crisis, European demand fell by 6% the following year. Between 2010 and 2014, with a European economy mired in a debt crisis and slowing growth, consumption fell by 21%. In four years. Experts say what is recommended is a 15% adjustment in ten months, showing that the reduction in demand will not be voluntary.

The only way to do this would be to cut off the supply to businesses or families. The dreaded energy rationing, which many countries are already considering in their emergency plans, such as Germany or Austria. A reality that is already in the minds of some European authorities. Next week, the European Commission will present the concrete measures for the whole of the European Union.

There is a gap of 60 TWh to cover

As Brueguel points out, the share of EU gas supply provided by Russia fell from over 40% in 2021 to just 20% in June 2022. The gap of over 300 terawatt hours (TWh) at During the first six months of 2022 compared to So far, 2021 has been mainly filled with 240 TWh of additional liquefied natural gas (LNG) imports, which are at the storage limit. The European Commission has urged member states to reach 80% reserves in November. Available storage data indicates stock is at 60%according to AGSI+ at the end of April 4.

Without the ability for Europe to fill the void in the event of a complete Russian supply cut, Brueguel experts calculate that gas reserves will be exhausted next February, knowing that winter temperatures are in the middle range. of recent years.

In the crisis of the coming winter, there will be countries that do not need to adjust their demand, such as Spain, Portugal and France, and others that it will have to reduce its consumption by up to 54% for reserves to hold after May 2023. The document shows that the weak point of the EU’s internal gas market is that it is not perfectly connected. Distributing the gas to the countries most in need will be difficult, or at least expensive, although infrastructure has already been put in place to mitigate the impact.

Plans to increase supply

Estonia, Lithuania and Estonia are the countries most exposed to the Moscow tap, but also some of those with better supply alternatives. The region is now heavily dependent on imports via the Klaipeda LNG terminal in Lithuania, but a new interconnector with Poland is in the works. Polish reserves are at 100% capacity. The storage volume is the fifth largest in the whole EU. They will also soon have a floating storage and regasification unit.

of this crisis, Portugal, Spain and France should come out unscathed. Their supplies are not vulnerable to Russian disturbances. Cooperation could help divert Algerian gas from Spain to Italy, making better use of unused Spanish capacity in a European context, Brueguel points out.

For its part, Germany has gone from being dependent on Russian gas to a need for flows from Norway, the surplus from the Netherlands and imports of LNG via Belgium. Berlin plans to commission a new 8 TWh per month LNG terminal in Wilhelmshaven.

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