Russia had been the largest supplier of natural gas to the European Union, accounting for nearly 40 percent of the bloc’s demand in 2021, giving Moscow enormous leverage over the EU’s energy sector.Īnd it was quick to use that power after unleashing its massive invasion of Ukraine in February, seeking to undermine Western unity and support for Kyiv by sharply curtailing gas exports to the bloc and driving prices to record highs. Much depends on what the Kremlin does - or doesn’t - do. Some nations have already put contingency plans in place should a crisis arise. A shortfall would lead to high and volatile energy prices in the EU, triggering industrial and household demand destruction and energy rationing. Natural gas is largely used to heat homes and buildings, fuel power plants, and run industrial processes, such as the production of fertilizers.
The EU could cover the remaining gap if it immediately invests an additional 100 billion euros ($107 billion) to expand alternative energy projects and boost energy efficiency, the IEA estimated. The IEA estimated that the EU gas deficit in 2023 could be as high as 57 billion cubic meters (bcm), or nearly 15 percent of its forecast demand, though it said measures currently being implemented - such as new solar and wind projects - should cut the shortfall to 27 bcm. “But in the long run, Russia simply can’t win this energy war,” she wrote. “In the short run, Europe is in a difficult predicament,” Agathe Demarais, the global forecasting director at the Economist Intelligence Unit, wrote in Politico in November, adding that the situation could worsen next winter. “If pipeline imports to the European Union from Russia drop to zero in 2023 and Chinese LNG demand rebounds to 2021 levels, then the European Union faces a serious supply-demand gap opening up in 2023,” the International Energy Agency (IEA) said in a December 12 report. A reversal of this year’s fortunes, combined with further natural gas export cuts by Russia, could leave Europe with insufficient energy supplies and skyrocketing prices next winter, analysts say. Meanwhile, slumping Chinese demand due to COVID lockdowns allowed liquefied natural gas (LNG) tankers bound for Asia to be rerouted to the bloc.ĮU officials also played a role, encouraging countries to cut consumption, improve efficiency, and boost alternative energy supplies to help offset the drop in supply.īut luck can run both ways. In the European Union this winter, fears of rolling blackouts triggered by Russian energy export cuts amid Moscow’s war in Ukraine have subsided thanks to good luck, good weather, and quick action.Ī warm start to the heating season in October and November enabled the EU to slash natural gas consumption and store more fuel for the winter months.
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