Do not relax. An increase in gas prices is expected in the coming months

However, implementing such a strategy is far from easy. Although Europe managed to reduce gas consumption to around 430 billion cubic meters in 2022 (13% lower than the 2021 figure), uncharacteristically warm weather played a major role, and there were significant differences between countries. Spain, which benefited from not being dependent on Russian gas, only slightly reduced its consumption, while France and Italy’s consumption reductions were smaller than the European average. On the other hand, the decrease in Germany and the Netherlands was significantly higher – by about 20% compared to 2021.

Assuming weather conditions return to relatively normal levels next winter, European governments will need to reduce consumption by 10% compared to 2021 levels to keep total consumption below 450 billion cubic meters.

Although the EU already set a voluntary target to reduce consumption by 15% last year, it would not have been achieved without this unusually warm weather. A 10% target is much more realistically achievable.

The reduction will be partly provided by industries such as chemical industry, metal industry and glass industry, which use intensive natural gas and which have experienced some difficulties after 2022. At the same time, European businesses and households are likely to maintain previously adopted prudent energy conservation practices, and mandatory consumption limits (eg for residential heating) are likely to remain. In that case, 50 billion cubic meters of the 60 billion cubic meter shortfall can likely be filled by reducing consumption.

To get the remaining 10 billion cubic meters, Europe will need to import more LNG from other global suppliers. According to the data of the International Energy Agency, it is expected that in 2023, the volume of production of liquefied natural gas in the world will increase by about 23 billion cubic meters. But this means that Europe will need to use almost half of the total increase. And with Europe facing stiff competition from recovering Asian economies, including China, demand for LNG is likely to push the price on the TTF exchange above current levels, expected to be around €80/MWh.