Europe is getting anxious—again.
Thanks largely to unusually warm weather, along with government planning and a bit of luck, Europeans can breathe a sigh of relief: They have enough natural gas to heat their homes this winter.
But next winter will be the tougher challenge, as Europe, engulfed in an energy crisis, continues to hunt for non-Russian natural gas as it inches its green transformation forward.
Leaders and experts worry last year’s supply scramble was just a teaser of what’s to come.
Next winter will be the true test of Europe’s energy independence since Russia’s invasion of Ukraine.
The European Union’s underground gas storage sites were 83% full at the beginning of this month, higher than the same time last year when facilities were a little more than half full.
While Russian gas supplies to Europe have been dwindling as the war drags on, Russia still supplied the EU with over 30% of its gas needs in the first half of 2022, helping the bloc fill its underground storage tanks. In 2021, Russia’s share of EU gas imports was around 50%. By August 2022, about six months into the war, Russia supplied only 17.2%.
Lower demand for liquefied natural gas (LNG) in Asia last year also allowed Europe to soak up spare supply to compensate for reduced Russian gas deliveries, said Roxana Caliminte, deputy secretary general at Gas Infrastructure Europe, representing European gas infrastructure operators. The EU imported 134.8 billion cubic meters (bcm) of LNG in 2022, up from 81 bcm the previous year.
While “the odds were in Europe’s favor” last year, Caliminte said, 2023 is a “blackhole full of unknowns.”
The International Energy Agency (IEA) warned in a December report the EU could face a shortfall of almost 30 bcm of gas this year—close to Spain’s yearly gas use—if Russian supplies fall to zero and China’s economy rebounds as it re-emerges from strict Covid rules.
In 2021, Asia accounted for about 74% of the global LNG demand, with China as the world’s top LNG importer. Analysts forecast China’s demand will gradually recover this year, albeit not to 2021 levels.
In recent weeks, falling demand and an unusually warm winter (which scientists attribute to climate change) have been pushing natural gas prices down to levels not seen since before Russia invaded Ukraine almost a year ago.
Gas savings this winter could see Europe heading into next winter with high inventories. But full gas storage can only cover about a quarter of the EU’s annual gas consumption.
The war in Ukraine has driven the EU to swiftly reduce its reliance on Russia, historically the bloc’s main natural gas supplier.
EU countries have been scrambling to forge new gas deals with other exporters like the United States or countries in the Middle East, while also trying to accelerate the bloc’s green transformation through a faster uptake of renewable energy, energy savings plans and a widespread switch to electrically powered heat pumps.
Stronger efforts in these areas, as well as a recovery in nuclear and hydropower output from decades-low levels in 2022, could help narrow the potential gas gap this year, the IEA said.
Europe also needs to reduce its energy use overall. A third of EU countries did not come up with measures to reduce energy demand, according to a recent analysis by the European Environmental Bureau, a network of nonprofits. Consumers have also been under pressure to sacrifice comfort and cut consumption. But the German energy regulator said the country’s December gas savings were well below targets to avoid a gas shortage.
“Renewable deployment will grow and electrification of heat will accelerate, but not nearly fast enough to obviate the need for alternative natural gas supplies into Europe,” said Bordoff, who is also co-founding dean of the Columbia Climate School.
In the meantime, Europe should consider “some sort of wartime measure” to expedite the build-up of renewable energy plants, said Georg Zachmann, senior fellow at Brussels-based think tank Bruegel.
For example, Zachmann suggested installing solar plants on suitable fields in Spain and Italy without having to go through the usual, lengthy permitting process “so we can start producing electricity” as quickly as possible.
These stopgap plants could always be reconsidered later, Zachmann said. “If we, in three years’ time, find out that they look ugly and actually some snakes don’t like them, then we pull them off and put them elsewhere when we have the electricity in the rest of the system,” he said, referring to the potential risk these installations pose to wildlife.
EU lawmakers are negotiating rules to speed up permitting for designated renewables zones, but once agreed upon it will still be months before those rules come into effect.
“Trying to do everything perfect now goes at the expense of kilowatt hours that we need to produce next year,” Zachmann said.
Amy Harder contributed reporting to this article.