Moderate progress by EU in cutting gas demand


Lower usage: A worker checks gas pipes in Lubmin, Germany. The European Union’s seven-largest consumers, including Germany, cut total consumption by 22% in the three months from October to December compared with a year earlier. — AP

EUROPE has experienced a mild winter, but the region also managed to cut its temperature-adjusted gas consumption in response to high prices, public information campaigns and industrial closures.

The European Union’s (EU) seven-largest consumers (Germany, Italy, France, the Netherlands, Spain, Belgium and Poland) cut total consumption by 22% in the three months from October to December compared with a year earlier.

Milder temperatures accounted for most of this reduction, with the number of heating degree days in each country down by an average of around 16% between October and December compared with 2021.

But there was also a moderate cut in underlying temperature-adjusted consumption, attributable to a combination of customer response to high prices, public information campaigns to cut demand, and industry shutdowns.

October was unusually warm across the region and none of the major consuming countries made significant progress in reducing underlying demand.

Underlying consumption

But as temperatures turned colder in November and December, there was more headway in cutting underlying consumption.

Germany, the region’s largest consumer, was slightly colder in December 2022 than in December 2021, with the number of heating degree days up by 5%.

But consumption per degree day was cut by 19% ensuring total consumption was still down by 14% compared with a year earlier.

At the other extreme, Italy, the region’s second-largest consumer, was mild in December, with 18% fewer degree days.

But the country also managed to reduce its consumption per degree day by 8% ensuring total consumption fell by 24%.

Every country reduced its temperature-adjusted use in December, with cuts ranging from 19% in Germany and Spain, to 17% in Belgium and the Netherlands, 13% in Poland, 11% in France, and 8% in Italy.

Under pressure

The pressure to adjust has fallen most heavily on energy-intensive industries, including chemicals, fertiliser, steel, ceramics, glass, smelters and greenhouse horticulture.

In many of these industries, consumption has fallen sharply through short-time working and plant closures, which resulted in significant gas conservation.

But with the burden falling so heavily on industry, the implication is that savings by power generators and households have been relatively modest after allowing for the warm winter.

European countries got lucky with the weather and industry shouldered a disproportionate share of the burden of reducing demand.

Next winter might not be as mild and industry cannot continue shouldering most demand-reduction without the permanent loss of capacity.

Households may have to curb consumption further next winter if temperatures revert closer to the long-term average. — Reuters

John Kemp is a Reuters market analyst. The views expressed are the writer’s own.

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