Europe will face another energy crisis in 2023 and will look for ways to compensate for the gas shortage of about 30 million cubic meters, while the only gas transportation route from the Russian Federation through Ukraine is exposed to great risks due to intense shelling
“The main source of pipeline gas supply from Russia to Western Europe was Nord Stream, which was damaged in an act of sabotage in September. The region still receives a small amount of Russian supplies via Ukraine, but the Kremlin’s heavy shelling of energy infrastructure puts this route at risk. Without this route, filling storage will be problematic,” the publication notes.
The publication cites the forecast of the International Energy Agency, according to which Europe will be faced with a shortage of 27 billion cubic meters of gas next year, on the condition of a complete refusal to supply this fuel from Russia. Europe was able to reduce gas demand by 50 billion cubic meters this year (about 19% of total consumption), but this is only part of the solution to this problem. Already this year, volumes of LNG liquefied gas supplies to Europe from the USA, Qatar and other countries have reached record levels, and this trend will continue next year. This means that gas prices will remain high, and this trend may continue until at least 2026.
In these conditions, the European Commission, according to the publication, has set new goals for gas storage in storage facilities. In particular, EU countries have been asked to keep their gas storages filled to at least 45% until February 1 next year, in order to avoid their complete depletion by the end of the heating season. Under favorable conditions, if the winter is relatively mild, this limit of gas to be stored in storage can reach 55%.
As Bloomberg notes, this year the European Union managed to fill the storages, despite the record prices in the summer-autumn, but next year this task will be complicated, since the EU’s supply structure will focus only on alternative sources other than Russian pipelines.
EU countries have already spent the equivalent of $700 billion to protect households, businesses and industry from record energy prices. According to Bloomberg’s calculations, based on the economic data of the World Bank, the total sum of expenses of the EU and its member states to mitigate the consequences of the energy crisis could reach $1 trillion. These calculations coincide with the data of the European agency Bruegel.
As already reported, as of November 2022, the EU countries managed to fill gas storages by 95%, even though Russia blocked gas supplies to Europe by pipelines by more than 80%. EU countries were able to compensate for this amount by saving and improving energy efficiency, and by diversifying gas supply routes from reliable suppliers, with the intention of gradually completely abandoning Russian fossil fuels. In order to stabilize prices, the EU has created a joint platform for gas purchases, the participants of which are also Ukraine, Moldova and the countries of the Western Balkans.
At the same time, the EU is discussing with partners and suppliers the introduction of a “price ceiling” for natural gas purchases. At this stage, the EU member states could not reach a unified position on this issue, which will be discussed again during the meeting of energy ministers of the EU countries in Brussels, which will take place on December 19 in the format of an extraordinary EU Council.