Europe is depleting its natural gas reserves at the fastest rate in six years, as persistent cold weather and weak renewable energy output stress the continent’s energy systems. These conditions are testing Europe’s shift away from hydrocarbons and reigniting concerns about energy security.
Since the official start of the winter season on October 1, natural gas reserves in the European Union and the UK have declined by 83 terawatt-hours, according to energy analyst John Kemp. This represents the steepest withdrawal rate since 2016, over four times higher than the average of the past decade. Kemp noted that while current storage levels remain adequate, they are noticeably lower than the past two winters, based on data from Gas Infrastructure Europe.
In Germany, gas reserves were at a healthy 90.93% capacity as of November 30, yet withdrawals surged to 831.6 TWh, vastly exceeding the 44.38 TWh injected. The country’s daily consumption stood at 888.83 TWh, fueled by limited solar output and inconsistent wind energy production. Across the EU, storage levels were at 85.47% capacity, with withdrawals reaching 4,364 TWh, compared to injections of just 538 TWh.
The ongoing demand spike has driven gas prices higher. November’s European gas benchmark price at the Title Transfer Facility averaged 47 euros per megawatt-hour, a 16% increase from October and nearly double February’s three-year low of 25 euros per MWh. The price pressures are compounded by sub-zero temperatures in northwest Europe and the U.S. Northeast, which have tightened global gas markets, according to Quantum Commodity Intelligence.
Adding to the strain, Europe risks losing the last remaining volumes of Russian pipeline gas transiting Ukraine. The current transit agreement between Gazprom and Ukraine’s Naftogas is set to expire on December 31, and Naftogas has signaled it will not renew the contract. This potential cutoff comes as demand in Asia rises, pushing global LNG spot prices higher.
In November, Europe imported an estimated 9.16 million tons of LNG, with 4.32 million tons coming from the United States. Although alternative sources, including Russia, are contributing to supply, rising prices are straining budgets. Asian spot market prices for LNG have surged by 76% this year, leaving Europe reliant on costly imports. Goldman Sachs warns that prices could climb above $20 per million British thermal units if Europe’s supply tightens further.
Samantha Dart, co-head of commodity market research at Goldman Sachs, highlighted Europe’s vulnerabilities, stating, “The loss of residual Russian volumes through Ukraine, combined with limited spare capacity and colder-than-average weather, makes further price hikes virtually certain.”
This crisis underscores Europe’s delicate energy transition. The continent’s reliance on renewables faces seasonal limitations, as wind turbines falter without wind and snow hampers solar panels. The current winter, reverting to traditional cold patterns, serves as a stark reminder: Europe’s path away from fossil fuels may demand a more balanced approach to energy security, or risk leaving millions in the cold.
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