The demand for gas in Europe is going to suffer a record drop of 10% this year due to the rise in prices, with the progressive closing of the tap of the russian exports and the policies of contraction of demand to avoid supply cuts this winter.
This is the panorama described by the International Energy Agency (IEA) in its quarterly report on the gas market in which, recognizing a high degree of uncertainty, It revises its own forecasts downwards and estimates that in 2023 the demand in Europe will decrease by another 4%.
From the outset, the expected reduction for 2022 in the Old Continent, which represents a cut of 54,000 million cubic meters, it will lead to a 0.8% decline on a global scale because historically high prices are taking their toll all over the world.
During the first eight months of this year, Europe has absorbed 10% less gas than in the same period of 2021 due to strong contractions in the residential and commercial sectors (-12%) and even more in industrial uses (-15%). ).
For the generation of electricity, however, gas has been burned practically at the same level as in 2021 because the drought has cut the production of hydroelectric plants in the countries of southern Europe and the stoppage is having to be compensated for months of more of half of the fleet of nuclear reactors in France for maintenance work or detected defects.
Contraction in LATAM demand
The drop in demand is not going to be a uniquely European phenomenon this year. In Latin America, the IEA also anticipates a decrease of the order of 4%which is explained by the fact that hydroelectric production is much better than in 2021, but also by a decrease in demand in the industry due to high prices.
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This evolution results, above all, in the fact that in Brazil gas consumption fell by 12% in the first semester compared to the same period last year because the hydroelectric plants were operating at a clearly higher rate thanks to more generous rainfall.
In Asia, the study authors estimate that the market will remain stagnant in 2022, which represents a more than abrupt slowdown after the 7% pull that was experienced last year.
This has to do with the very modest increase of 1% in China, due in part to the confinements and restrictions due to the “zero covid” policy imposed by the Beijing authorities.
North America is proving to be one of the few regions where demand is rising this year, despite the fact that prices there have also shot up to levels not seen since 2008. But that is largely due to the dynamics of production, which is going to increase by 4% in 2022 and 3% in 2023.
Global market stagnation in 2023
The IEA assumes that the gas market will remain in tension well into 2023. In fact, it anticipates an even lower increase than this year, of only 0.4%, with a new contraction of 4% in Europe .
In his report, he elaborates several crisis scenarios in the event that Russia completely cut off supplies to the European Union. Warns that if that happens after November 1, although the level of reserves is currently around 90%, that percentage could fall below 20% and that assuming that the EU will receive a high level of supply per ship of liquefied natural gas (LNG).
In the event that the arrival of methane tankers was not so fluid, reserves would remain around 5%, which makes supply cuts plausible if the winter were cold.
Preventing this black scenario and keeping reserves at a level of 25% would need to reduce demand this winter by 9% compared to the last five years and by 13% to guarantee a more comfortable level of 33%.
EFE International news agency based in Madrid and present in more than 110 countries.