But the ongoing price crisis disrupted the custom and current reserves are historically low for this time of the year, an ominous sign for the coming months. Traditionally, gas is cheaper during summertime and companies seize the moment to store it in large volumes to be well prepared before winter arrives. With companies from all around the world trying to get their hands on energy sources, prices began steadily rising. That hasn't happened yet," Dennis Hesseling, head of infrastructure, retail and gas at the Agency for the Cooperation of Energy Regulators (ACER), told Euronews. And that's a bit strange because normally if the price goes up and you're a supplier and you have spare capacity, you could use this opportunity to sell more gas at a higher price. They have kept their suppliers quite at the regular volumes. "The pipeline supplies we get from countries like Russia, Norway and Algeria, despite this higher price, have not actually supplied more gas to Europe. However, the growing demand was not met with a growing offer. East Asian countries then joined Europe in the quest for energy to kick start their COVID-ravaged economies. The economic recovery prompted a new wave of energy demand, which further increased during the summer when sweltering temperatures pushed people to use air conditioning and cooling systems. In spring, as the vaccination campaign gained traction around the continent, business activity began to intensify rapidly, with offices, restaurants and other venues reopening their doors and consumers pouring in, eager to spend their lockdown savings. This triggered a marked decrease in gas reserves, which reached a worrisome 30% by March. Trouble began brewing in the winter when colder-than-expected temperatures led to a higher-than-usual power demand to warm up buildings. "We urgently need a European policy menu pre-designed to react immediately to dramatic price surges," the letter said.īut as the crisis spills over the bloc and citizens express increasing concern, it's unclear how much power the European Union can exert to rein in the excesses of a liberalised energy market whose primary source comes from outside its own borders. Madrid also sent a letter to Brussels asking for EU-wide action. In Spain, the government has promised to bring prices down to 2018 levels. France said it will send one-off €100 payments to over 5.8 million low-income households. In Italy, Roberto Cingolani, minister for the ecological transitions, has already warned Italians to expect a 40% increase in their bills over the next months. The popular discontent has put governments on high alert, with ministers scrambling to come up with emergency measures, even if they're short-term and only partially effective to cushion the impact. Moreover, gas is also used for residential heating and cooking, making the price surge even more noticeable in the final expenses of consumers.Ĭitizens in countries like Spain, Italy, France and Poland are now facing all-time-high energy bills that add to the economic woes caused by the pandemic. The energy mix is vastly different across the bloc: fossil fuels have a marginal share in Sweden, France and Luxembourg, but take up more than 60% of total production in the Netherlands, Poland, Malta and Cyprus.Īs coal, the most polluting fuel, is progressively phased out, many countries resort to natural gas as a transitional resource to act as a bridge before green alternatives, like wind turbines and solar panels, are rolled out. Together, natural gas and coal still supply more than 35% of the EU's total production, with gas representing over a fifth. This, in turn, has sent electricity prices skyrocketing.Īlthough the European Union is gradually cutting down on its long-time dependency on fossil fuels – renewables became the bloc's main source of electricity for the first time in 2020 – the shift has not been fast and widespread enough to contain the fallout from the crunch. Prices of natural gas are skyrocketing: at the Dutch Title Transfer Facility, Europe's leading benchmark, prices have risen from €16 megawatt per hour in early January to €88 by late October, a hike of more than 450% in less than one year.
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