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Europe should thank mild autumn for averting gas crisis this winter: Kemp

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LONDON — Northwest Europe’s gas consumption fell sharply in October and November but primarily as a result of milder-than-normal temperatures rather than high prices, fuel switching and energy conservation appeals.

Combined consumption in the core area of Germany, the Netherlands, Belgium and Luxembourg was down by 26% in October and 25% in November compared with the previous ten-year seasonal average.¹

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But the number of heating degree days at Frankfurt in Germany was also down by 46% in October and 13% in November compared with the prior ten-year average.

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The main impact of high prices has been to curb industrial consumption by heavy gas users in the iron and steel, cement, ceramics, glass-making, smelting, chemicals and fertilizer sectors.

If industrial consumption, which is relatively insensitive to temperatures, is roughly removed from the total, then milder weather accounted for almost all the reduction in non-industrial consumption.

Chartbook: Northwest Europe gas consumption

High gas and electricity prices and calls for urgent energy conservation have had only a modest impact on the behavior of residential and commercial users.

Fuel consumption is deeply embedded in the design of buildings and appliances so it is hard for consumers to shift use by a significant amount without expensive investments or unpleasant behavior changes.

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Fortunately for European policymakers, mild weather across the northwest allowed European countries to continue filling storage until November 13, the latest date on record, and 18 days later than the median for 2011-2021.

For the same reason, mild weather delayed the onset of inventory drawdown, ensuring Europe-wide stocks are still the second-highest for the time of year despite colder weather since the start of December.

If Europe has averted a gas crisis this winter, the principal reason has been an unusually mild start to the heating season, with high prices playing a secondary role and conservation mandates a decidedly tertiary one. ¹ The Northwest Europe mega-region also includes northern France and southeastern England but data on sub-national gas consumption is not available in real time.

Related columns:

– Germany’s gas stocks should hold out despite inventory draw (Reuters, December 15)

– Europe’s gas stocks comfortable despite cold snap (Reuters, December 14)

– Europe on course to end winter with plenty of gas (Reuters, November 28)

– Europe’s gas storage peaks after record refill season (Reuters, November 18)

– Mission accomplished? Europe fills gas storage ahead of schedule (Reuters, October 4)

John Kemp is a Reuters market analyst. The views expressed are his own (Editing by Kirsten Donovan)


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