EU surpasses 15pc gas savings target

Market: Natural gas
20/04/23

The EU exceeded its target of cutting gas consumption by 15pc from the five-year average in August 2022-March 2023, with demand down by 17.7pc, according to Eurostat data released on Wednesday.

Four of the five largest consumers in the bloc — Germany, France, Italy and the Netherlands — decreased their consumption by more than the 15pc target outlined in the REPowerEU plan, with the Netherlands' consumption falling the most at 28.8pc. But Spain missed this target, reducing consumption by only 10.8pc. Gas demand in Spain was buoyed by a compensation mechanism introduced to support gas-fired power plants.

Across the bloc, Finland reduced consumption the most in the period at 55.7pc, followed by Lithuania, Sweden and Estonia (see reductions graph). The Baltic and Finnish gas markets were previously dominated by Russian supply, but following the start of the war in Ukraine, all four have halted imports from Russia, turning instead towards greater LNG imports alongside significant demand reduction. Malta, which has little gas demand, increased its consumption by 12.6pc, while Slovakia and Ireland reduced theirs by 1pc or less.

Demand fell the most in percentage terms in November, at 25pc, followed by October at 24.4pc (see monthly reduction graph). These were months with especially mild weather compared with long-term averages, particularly November, which allowed an extended stockbuild lasting to the middle of the month. This was rare for this period given average net withdrawals of 1.08 TWh/d in the first half of November in 2018-21.

The European Commission last month proposed a one-year extension to the voluntary 15pc demand reductions, which it expects could save 60bn m³ over the year, allowing the EU to reach its 90pc storage target by 1 November and avoid any shortages.

Historically mild weather helped Europe to achieve the demand reduction targets. In its annual report released today, the EU's earth observation programme Copernicus said that 2022 was Europe's second-warmest on record, with the summer the hottest ever. February, August and October-December had the strongest variations from average temperatures. Europe received its highest amount of surface solar radiation in 40 years.

In spring, precipitation was below average across much of the continent, with May precipitation the lowest on record for the month, Copernicus said. And river flow in Europe was the second-lowest on record, with 63pc of its rivers having lower-than-average flows.

By Brendan A'Hearn

Demand reduction compared to five-year average %

Demand reduction by country %

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