Voluntary gas-usage cuts will still fall far short of stopping the European energy crisis, new research says

  • The EU's 15% gas-for-power cut won't be enough to stop blackouts this winter, research from Rystad Energy says.
  • Analyst think Europe will have to cut an additional 5% of total electricity demand to make ends meet.
  • That would "appear a stretch," Rystad said, as Europe has only cut 2.2% of its electricity demand so far.

The European Union is scrambling to pull together enough fuel supplies ahead of winter, but even with a proposed 15% gas-for-power cut, the 27-country bloc is still likely to fall short of stopping an energy crisis and will need to cut total demand even further, according to new research.

Russian gas flows to Europe have fallen 89% so far this year in apparent retaliation for EU sanctions on Moscow. That's been exacerbated by the announcement that halted gas flows on the Nord Stream 1 pipeline would be indefinite, hiking the risk of a supply crunch this winter.

"Our analysis shows that the power generation balance in Europe is severely challenged in a scenario where gas supply is significantly reduced, because there is not much flexibility to ramp up considerably from other sources," Rystad Energy said in a note on Sunday.

The continent's nuclear generation has dropped 14% year over year, and hydropower generation has dropped 25%, wiping out 110 million megawatt hours in supplies. Coal, solar, and wind power could add another 34 million megawatt hours, but the rest will have to be made up through imports or lowering demand even further, analysts said.

Rystad estimated that even if Europe fulfills its proposed 15% gas-usage cut and supplements with alternates, Europe is still set to fall significantly short of fuel this winter — approximately by 51 million megawatt hours from September to March of next year

Total electricity demand would still need to fall another 5% to make up for the supply shortage, a goal that "would appear a stretch" for the 27-country bloc. So far, European electricity demand has only fallen by 2.2%.

"The coming winter is certain to be the most challenging Europe has seen in decades – and consumers or governments are expected to pay the price," Carlos Diaz, Rystad's Head of Power said, warning that blackouts and other supply issues could come as early as this month.

That dampens some optimism for the EU, which filled up its gas reserves to just over 81% as of Sunday, nearly two months ahead of schedule. Even if storage levels reach 90%, the EU would still be vulnerable to blackouts this winter, the International Energy Agency previously warned, especially in event of a total shutoff from Russian gas.

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Voluntary gas-usage cuts will still fall far short of stopping the European energy crisis, new research says Voluntary gas-usage cuts will still fall far short of stopping the European energy crisis, new research says Reviewed by mimisabreena on Wednesday, September 07, 2022 Rating: 5

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