Europe faces an energy crisis
October 4, 2021 - Gas prices are closing in on €100 per megawatt-hour -- up 400% since the start of the year -- while Europe’s gas stockpiles are at their lowest level in a decade, and wind generation is down by almost a third.
Energy prices are soaring as economies emerge from the pandemic -- boosting demand just as supplies fall short.
The EU is shuttering coal plants as part of its bid for a coal-free Europe by 2030. Gas stockpiles are much lower than usual, and the continent’s increasing reliance on wind turbines has become vulnerable as speeds in the North Sea have been among the slowest in two decades. In September, Ireland’s grid operator warned that it faces a risk of blackouts due to lack of wind.
Deliveries from Russia, which supplies more than 40 per cent of EU gas imports, are limited. Members of the European Parliament have called for an investigation into whether Gazprom is withholding natural gas to push approval of the Nord Stream 2 pipeline.
Working natural gas inventories in Europe have remained relatively low so far during this year’s so-called injection season -- defined as April through October -- and totalled 829.99 terawatt-hours as of October 4, 2021, or 75.05 per cent of storage capacity, according to data from Europe’s Aggregated Gas Storage Inventory (AGSI).
Frigid weather late in the 2020–21 heating season and a cold spell in April led to rapid drawdowns of natural gas inventories early in 2021.
AGSI reports that natural gas inventories are particularly low in Austria, the Netherlands, Germany and Italy. At the start of October, these countries held, respectively, 46 per cent, 41.6, 31.5, and 14.7 per cent less natural gas in storage than at the same time in 2020.