Europe’s energy crisis: Five charts to explain why your bills might go up this winter

Natural gas prices have risen in Europe as countries exit the COVID-19 lockdown, fueling a crisis that is likely to hit consumer bills this …

Natural gas prices have risen in Europe as countries exit the COVID-19 lockdown, fueling a crisis that is likely to hit consumer bills this winter.

The cost is now six times higher than last year in Europe and continues to rise, with the crisis unlikely to subside until spring.

Governments are making efforts to provide subsidies and lower taxes to protect consumers.

Here are five diagrams to help you visualize what is going on.

Natural gas prices are rising steadily

The price of natural gas is six times higher than last year and around four times higher than in spring.

This is due to increasing global demand as countries restart their economies and get out of lockdown. A long winter last year and the competition for gas from East Asian countries have influenced the rising prices.

There are also problems on the supply side, with delayed maintenance and lower investments causing problems. Read more about the crisis here.

These gas prices in turn determine the price on the electricity markets, because over a fifth of European electricity comes from natural gas.

Natural gas imports

The EU is heavily dependent on natural gas imports coming from outside the bloc as domestic production declines.

According to the bloc’s statistical office, Eurostat, the EU had to import almost 90% of its natural gas from outside the bloc in 2019.

Russia is the largest natural gas exporter to the bloc, which in 2020 will account for 43.4% of imports from outside the European Union, followed by Norway.

There have been many questions among analysts about supplies from Russia this year and whether the country has withheld additional gas to force the opening of the newly completed Nord Stream 2 pipeline.

Natural gas storage

One of the concerns in the European Union this year is natural gas storage, which is lower than at that time last year.

While it was around 95% last October, it is currently around 75% after stocks have declined after a long winter.

“We are not prepared, well prepared to handle the winter season, the heating system, so that is the worry that is driving prices up. Traders, markets may expect a supply shortage in winter and that is driving upwards. ” prices now, “said Simone Tagliapietra, Senior Fellow at the Brussels think tank Bruegel.

Inflation in the euro area

The rise in natural gas prices has also boosted inflation in the 19 countries of the euro zone, according to newly published Eurostat data.

Inflation in the euro zone is due to inflation in the energy sector of 17.4% on a 13-year high of 3.4%. That was a -8.2% rise in inflation in the same sector last September.

Importance of natural gas in EU consumption

In the 27 EU Member States, natural gas is the second most frequently consumed fuel after oil and petroleum products.

Although consumption has decreased compared to 2008, it remains a great source of energy.

Some experts have argued that part of the problem is fossil fuel dependence and that moving to more renewable energy will help solve the problem.

But public demand for fossil fuels also has to adapt to a new system that contains more renewable energies.

Bir cevap yazın
Related Posts