EU gas consumption down almost 20 percent

Europeans have massively reduced their consumption of natural gas, after the cost of the fossil fuel skyrocketed largely as a result of the Russia-Ukraine conflict.

The European Union's official statistics agency, Eurostat, said this week gas consumption across the 27-member bloc was 19.3 percent lower between August 2022 and January 2023 than it was during the same period in the preceding five years.

The agency said the huge drop was likely partly driven by householders and businesses wanting to reduce costs, partly attributable to unusually mild weather, and partly because consumers wanted to show they did not need Russian gas supplies, which were the EU's main source before the Russia-Ukraine conflict began. Jacob Mandel, a senior associate at Aurora Energy Research, told the Reuters news agency: "Weather has definitely played a very big role."

The EU, which had asked gas consumers to cut their consumption by 15 percent to help ease its transition away from Russian gas, said the 20 percent fall was unexpectedly good news.

Consumers cut consumption the most in Finland, where the amount of gas used during the period was 57.3 percent less than usual. Lithuania and Sweden also greatly cut consumption, by 47.9 percent and 40.2 percent, respectively.

The think-tank Bruegel said consumption in Germany, which is the EU biggest consumer of gas, fell in January alone by 27 percent among companies, and by 25 percent among households.

Ireland only cut gas consumption by 0.3 percent, although Eurostat noted it was also the only nation in the bloc that had not imported gas in the past from Russia.

The EU imported 155 billion cubic meters of gas from Russia before the Russia-Ukraine conflict began, but, with the bloc transitioning away from Russian gas, it is only set to import 20 billion cubic meters this year, Bloomberg said.

While the cost of gas skyrocketed both because of shortages of supply and a spike in demand attributed to the easing of COVID-19 pandemic restrictions, the cost of the fuel did start to edge back down in Europe during December.

Trading at Europe's leading gas hub, the Title Transfer Facility, closed on Monday at 49.87 euros per megawatt-hour, which was much lower than the peak cost in August of 338 euros per megawatt-hour. The cost today, however, still contrasts with the selling price of 17 euros per megawatt-hour recorded in February 2021.

Reuters reported on Wednesday the reduced demand for gas meant the EU's underground gas storage reservoirs were more than 50 percent full at a time when they would ordinarily be almost empty.

Bloomberg said the bloc's relatively healthy gas reserves mean the shortages, rationing, and even rolling blackouts many EU nations had feared may happen this winter are now a very unlikely prospect.