A winter with mild temperatures. Greater environmental awareness and the adoption of energy efficiency measures. The increase in the use of renewables. Or a militant reduction in consumption as a gesture against Russia's war against Ukraine.
For one reason or another, Europeans have learned their lesson and have consumed less gas during 2023, according to a study by the Institute for Energy Economics and Financial Analysis (Ieefa) that was made public yesterday. Specifically, European demand has fallen to the lowest level in ten years, around 452 billion cubic meters (bcm). Only since the invasion of Ukraine, in a two-year period, has the cut been 20%. Germany, Italy and the United Kingdom are the countries that have tightened their belts the most.
“Two years after the Russian invasion of Ukraine, the European energy system is more diversified and resilient. Due to efficiency measures and because the installations of renewable energy and heat pumps have been accelerated. This has prepared the continent to continue reducing gas demand,” said Ana María Jaller-Makarewicz, European analyst at Ieefa.
Given the closure of the Russian gas pipeline due to sanctions, Europe has opted to import liquefied natural gas (LNG) by sea, which is much more expensive. In particular, from the US (46% of its total purchases abroad) and Qatar (11.7%). “Having put the security of energy supply at risk by becoming too dependent on one source, Europe must learn from its past mistakes and avoid becoming too dependent on the United States, which provided almost half of its LNG imports last year.”
And Russia? There is no veto or sanctions on the purchase of LNG from this country, so the Europeans continue to finance Putin's war machine even though they do not use the gas pipeline as before the conflict. Europe acquired 9.4% of its LNG imports from Russia in 2023. What's more, between 2021 and 2023, with the war in the middle, Russian supplies to Europe increased by 11%. This means some 24 billion euros directly into Moscow's coffers. It is true that in these data we must consider that the contracts prior to the conflict in Ukraine had a long-term duration.
Spain was the European country that received the most Russian gas in 2023, with almost 7,000 million cubic meters. In the last two years, the flow of Russian gas to Spanish regasification plants has doubled.
The European terminals that imported the largest volumes of Russian LNG between 2021 and 2023 were Zeebrugge (Belgium), Montoir-de-Bretagne (France), Bilbao, Gate (Netherlands), Dunkerque (France) and Mugardos.
Despite the decline in consumption, European countries continue to build new LNG infrastructure: since February 2022, eight import terminals have been put into operation and another 13 projects are expected to be operational by 2030. Spain has seven terminals and is the European country with the greatest regasification capacity (68,000 million cubic meters).
This means the combined capacity of Europe's LNG terminals could be three times its expected demand by the end of the decade. An investment that is largely underutilized.
Since February 2022, Europe has added 53.5 billion cubic meters (bcm) of new LNG regasification capacity. Last year, eight of the 37 import terminals in Europe had utilization rates below 50% (in Spain there were four, including Barcelona).
According to data from the EU Council from last week, gas reserves in European warehouses are almost at maximum levels. Now, in the middle of winter, they far exceed 80%, when in 2021 they were close to 50%. Europe now needs less gas, but it continues to buy it from the country with which it is supposedly at odds.
