Nat GAs Europe Crisis Poss Black Outs Nat GAs Europe Crisis Poss Black Outs
The combination of low natural gas inventories, lack of investment in natural gas production as well as the outright elimination of natural gas production, inadequate natural gas storage, an over-reliance on renewables and high stimulus-fuelled demand has led to massive increases in electricity prices throughout Europe (including the UK) and could result in widespread power/heating shortages over the months ahead. The issue is summarised in the following excerpts from recent Bloomberg and WSJ articles (linked HERE, HERE, HERE and HERE):
“Europe has an energy problem, and it could get worse once winter grips the continent. Gas and electricity prices are soaring, windmills are standing idle for lack of wind and shuttered coal-fired power plants are being brought back into use. There are even suggestions to use diesel generators for private generation. But oil isn’t the solution to the continent’s energy woes.”
And:
“As we head toward winter, the continent’s natural gas stockpile stands at 75% of the level it was at this time last year — the lowest for the time of year since 2013. That’s raising prices and stoking concerns about shortages and power blackouts over the coming months.”
And:
“Europe could face blackouts this winter if the weather gets cold, Goldman Sachs Group Inc. said, warning that the region’s industrial users will need to curb consumption. The continent is running out of time to refill its depleted storage sites before the start of the heating season in about a month, with inventories at their lowest level in more than a decade for this time of the year.”
And:
“While the U.K.’s supply squeeze is particularly acute, Europe as a whole is suffering from insufficient inventories just weeks before the heating season starts. This predicament has been years in the making, with the region winding down its own gas output and boosting reliance on Russia and on intermittent wind and solar power. With those sources falling short this summer, and demand rising as economies emerge from the pandemic, prices have soared.”