Gas demand in Europe is expected to decline this year, driven by cheaper coal: International Energy Agency


Gas demand across Europe is expected to decline this year as rising prices make coal a more competitive option. International Energy Agency (IEA) Said on Monday.

Last year, European gas consumption increased by an estimated 5.5% to 552 billion cubic meters (bcm), despite global price hikes in the midst of a global supply chain crisis.

However, in 2022 the IEA expects demand to decline by more than 4% to 527 bcm. This is partly due to the reduction in gas combustion in the electricity sector, which can be reduced by 6% compared to 2021.

“Gas-fired power generation is expected to decline amid the strong expansion of renewable energy, but soaring gas prices will continue to weigh on our competitiveness with coal-fired power generation,” the report said.

“Assuming that after the unseasonable cold spring of 2021 will return to average weather conditions in the first and second quarters, distribution network-related demand is expected to decline with lower heating requirements,” the IEA said. I am saying.

However, gas demand in the industry is “expected to approach pre-2020 levels and continue to recover.”

Last year, as global supply declined, gas prices in Europe and Asia soared to new highs, and consumers faced higher bills.

Meanwhile, prices have risen to their highest levels in 10 years in the United States amid low global supply and storage levels, infrastructure outages, and competition for liquefied natural gas (LNG) cargo.

However, European coal and EU carbon prices also rose last year, but these rises outpaced the rise in gas, resulting in a shift in short-term marginal costs to using coal to generate electricity, the IEA said. rice field.

“Very low natural gas prices in 2020 have enabled a significant switch from coal to gas in power generation in different regions and markets,” said the IEA.

“The most visible switch has occurred in the United States, but gas has also grown at the expense of coal in Europe and some Asian markets. However, this trend has been accompanied by a gradual recovery in natural gas prices. It had already begun to change in the second half of 2020. “

According to the report, the shift to coal later occurred in Europe, with significant recovery in electricity demand in the second quarter of 2021 compared to 2020, benefiting both coal and gas. rice field.

“In late 2021, rising prices opposed the use of gas in power generation. Coal-fired power increased by more than 11% in Europe in 2021, while gas-fired power fell by 1%.” Said the IEA. “Soaring natural gas prices have also negatively impacted demand from industrial consumers who switched to alternative fuels or reduced production in the last few months of 2021.”

The transition from gas to coal occurs because the UK is expected to face higher energy prices in April when energy price caps are raised and taxes are raised.

Joe Malinowski, founder of TheEnergyShop.com, warned that some families could soon pay more than £ 500 a year, which could be even higher.

Malinowsky said Online email“In the current situation, we are planning an increase of at least £ 500. If things don’t settle down quickly, we can’t rule out an increase of £ 600, £ 700, or even £ 800.”

Catabella Roberts

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Katabella Roberts is a reporter currently based in Turkey. She focuses primarily on the United States and covers the news and business of The Epoch Times.