Energy Experts Warn of Potential Gas Crisis in Winter 2023

As Europe has managed to remain powered through the holiday season despite an energy crisis that has been ongoing for over a year, experts are beginning to look ahead to Christmas 2023.

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Grids are currently concentrating on making sure that households have enough gas and electricity to last them through the upcoming months, but specialists are already worried that the same issues could resurface next winter, and could even become more severe. The effects of the current gas crisis could be long-lasting. In December, a well-known energy consultancy in the UK cautioned that gas prices could stay elevated until the end of the decade.

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This winter, Britons are facing higher costs than ever before to heat their homes. This is a trend that is being seen across Europe, where gas and electricity prices have risen significantly in the past eighteen months. Experts suggest that the state of the continent in the upcoming winter season will be largely determined by the temperatures of the months of January, February, and March.

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If temperatures are higher than usual, people will not require as much gas to heat their homes, resulting in European gas storage sites having more reserves when winter is over. It would be simpler for Europe to restore its supplies during the summer months, even without relying on Russian gas.
Martin Young, a senior analyst at Investec, noted that additional wind power will be available before the next winter season, which should help with electricity supply. Nevertheless, there is still some uncertainty regarding coal and nuclear electricity generators.

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The Government made an agreement with retired coal power plants that they would be available to provide energy this winter if needed. Fortunately, this has not been necessary yet, but ministers may choose to extend the arrangement into the following winter. I have a hunch that there won't be major alterations in the supply sector in the UK; it will depend on how we come out of winter if we look at the broader European context, he stated.

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Last summer, the availability of gas from Russia was decreasing, yet some was still being supplied, allowing Europeans to store it for future use.
It is expected that the pipelines connecting Russia to Europe will be nearly closed off by the summertime. Due to the lack of natural gas resources in Europe, the continent will have to rely on imports from the United States, Qatar, and other countries, which will be transported by ships.

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The global supply of liquid natural gas (LNG) tankers is limited, as is the number of ports in Europe where they can dock.
In an effort to bring more of this gas to Europe, projects for new terminals have been initiated or expedited in recent months. This gas is cooled to a temperature of -160c in order to make it liquid, allowing for easier storage and transportation. In December, Germany made a major shift in its energy policy by inaugurating its first Liquefied Natural Gas (LNG) terminal. This move away from relying heavily on Russian gas imports marks a significant change for the country. Two additional LNG terminals are projected to be operational in Germany in the coming year.

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The United Kingdom, Spain, and Portugal have the highest import capacities for liquefied natural gas (LNG) in Europe, allowing them to access global markets. However, the Iberian peninsula does not have many gas pipelines that link it to the rest of the continent, making the Spanish terminals less beneficial to its neighboring countries.
Despite Centrica recently reactivating an old gas storage facility, the UK has limited options for storing the liquefied natural gas (LNG) it will be importing during the summer months.

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Due to this, a large portion of the gas that enters UK terminals will be sent to other European countries, particularly the Netherlands. This gas will be stored in underground sites in order to be ready for the winter season.

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Gas from Norway and the UK will be used to replenish Europe's gas supplies during the summer months when households and businesses require less of the resource.
Although Liquefied Natural Gas (LNG) can provide a partial solution to the supply of gas to Europe, it is not enough to bring gas prices back to their previous levels. LNG is a costly method of transporting gas, as it requires a great deal of energy and specialized equipment to keep it cold enough for the tankers.

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Due to the fact that Liquefied Natural Gas tankers can go anywhere, Europe will have to offer more than other buyers around the world in order to acquire the essential gas it requires. By transitioning to using LNG tankers for its gas requirements, Europe will be subject to higher prices for an extended period of time.

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According to Cornwall Insight, a well-known energy consultancy located in East Anglia, prices are anticipated to stay elevated until the end of the decade.
According to lead research analyst Dr Matthew Chadwick, it is likely that the flow of Russian gas will be significantly decreased by summer 2022 and that gas prices will remain higher than before the pandemic until at least 2030. This is due to the market taking time to adjust to the shift in supply and demand dynamics in Europe.