Brilliant round up of the gas situation in Europe.
It is really interesting to see how the market reacts and how new suppliers start to ramp up, consumers adapt and alternatives are found. Economics in actions.
Great post! Been super fascinated by this whole European energy crisis since it started earlier this year, but I didn't know they were heading for it anyways. That was super interesting. Looking forward to more post from you in the future!
How will this affect Europe's transition to non-fossil fuel sources of energy? Solar, wind, etc. take time to build and I doubt will be helpful this winter, but what about 2024-2032 where you say natural gas will continue to be expensive? Will there be faster energy transition than the counterfactual, no covid, no russo-ukraine war scenario?
Natural gas is a complement to renewable energy because it can be ramped up quickly, at least this will be the case until better ways to store electricity generated by renewables. Gas is also used in heating in lots of homes so a base demand will be there for quite some time.
Hard to tell at the moment—the immediate effect seems to be a lot of switching to coal/oil/lignite electricity generation but with a net negative effect on total consumption. A lot of European countries have seemingly boosted their targets for renewable share since before the pandemic, but it's hard to know how well they'll hit those targets. Here's a couple things I was reading in case you were interested in more.
Brilliant round up of the gas situation in Europe.
It is really interesting to see how the market reacts and how new suppliers start to ramp up, consumers adapt and alternatives are found. Economics in actions.
Thanks for the great post.
Thanks Martin! I am glad you enjoyed the piece
Great post! Been super fascinated by this whole European energy crisis since it started earlier this year, but I didn't know they were heading for it anyways. That was super interesting. Looking forward to more post from you in the future!
Thanks Jacob! I am really glad you enjoyed the post
How will this affect Europe's transition to non-fossil fuel sources of energy? Solar, wind, etc. take time to build and I doubt will be helpful this winter, but what about 2024-2032 where you say natural gas will continue to be expensive? Will there be faster energy transition than the counterfactual, no covid, no russo-ukraine war scenario?
Natural gas is a complement to renewable energy because it can be ramped up quickly, at least this will be the case until better ways to store electricity generated by renewables. Gas is also used in heating in lots of homes so a base demand will be there for quite some time.
Hard to tell at the moment—the immediate effect seems to be a lot of switching to coal/oil/lignite electricity generation but with a net negative effect on total consumption. A lot of European countries have seemingly boosted their targets for renewable share since before the pandemic, but it's hard to know how well they'll hit those targets. Here's a couple things I was reading in case you were interested in more.
https://www.euractiv.com/section/energy/news/eu-saved-e11-billion-in-gas-imports-thanks-to-solar-and-wind-report/
https://www.bruegel.org/sites/default/files/2022-09/PC%2017%202022.pdf