FRANKFURT, Germany (AP) — Europe’s natural gas and electricity prices scrambled for mild weather and months to fill gas stores ahead of winter and replace Russian supplies during the war in Ukraine. This is a welcome respite after Russia slashed natural gas flows, sparking an energy crisis that has accelerated record inflation and a looming recession. is.
But experts say European governments are rolling out relief packages to those struggling with high utility bills, shrinking household budgets and curbing volatile gas and electricity prices that have forced some businesses to close. He warns that it’s too early to exhale, even though he’s working on long-term ways to .
Uncertainties include not only the weather, but also how people will respond to appeals to refrain from using heating, and how much demand there will be from Asian countries for scarce energy supplies. And the war a few hours to the east is a cauldron of unpleasant surprises that could cut the energy supplies needed for electricity, heating and factory work, causing prices to skyrocket.
Perpetual unknowns are making energy-intensive businesses nervous. They are appealing to governments to help them and their customers weather the energy storm so that disruptions in the supply of everything from glass to plastic to clean hospital sheets don’t spill over into the economy.
“We must remember that we are still in a tense situation,” said Agata Roscott Strakota, an energy policy expert at the Eastern Research Center in Warsaw. and the economic war between Russia and Poland.
The good news is that European TTF benchmark natural gas prices fell below €100 ($) per MWh on Monday for the first time since June, down 70% from a late August high of around €350 per MWh. Electric bills have also gone down.
Analysts say lower gas prices have allowed European fertilizer producers to resume operations, but business owners like Sven Paar are not relieved. His commercial laundromat in Waldüern, Germany, this year uses about €30,000 worth of natural gas to wash eight tons of hospital and hotel bedsheets and restaurant tablecloths each day in his 12 machines. We are planning to operate a large machine of
According to his local authority, the bill will rise to €165,000 next year. In addition, Mr Paar is uneasy that the German government has not made it clear whether laundries like his are considered essential to the economy and immune to cuts in the case of state-imposed rationing. We feel. Reports that utility regulators are working to sort out the issue are not enough.
“The problem is that everyone has heard something. Just hearing something doesn’t give the plan security,” he said. A letter he sent to regulators went unanswered.
“That’s the problem. I hope every day that I don’t get a call from someone saying ‘no gas tomorrow,'” he said.
The German Hospital Association took up the issue on behalf of laundries like him, saying hospitals outsource most of their laundry services and without them they would run out of sheets and surgical drapes within days. said it would.
The German government is working to roll out plans to cap gas prices for hard-hit companies. The association representing small businesses says it understands the government will focus possible distributions on Germany’s 2,500 largest gas users, sparing companies of Paar’s size in most cases.
Helping mitigate the possibility of rationing is that Europe’s underground storage has expanded to 94%, compared with 77% at this time last year, in what energy expert Loskot-Strachota called a “considerable success.” % has been reached. The mild weather across Europe was a big help. For example, it was a relatively mild 18 degrees Celsius (64 degrees Fahrenheit) in Warsaw on Monday.
Germany, once heavily dependent on Russian gas, has filled to 97% of its storage capacity, France to 99%, and Belgium and Portugal both to 100%. This was achieved by importing record amounts of liquefied natural gas (LNG) by ship from the United States and Qatar rather than by pipeline from Russia, and by increasing pipeline supplies from Norway and Azerbaijan. .
The scramble to line up more LNG flows to homes and businesses that have led to tanker backup off the coast of Spain, a major processor.
Spanish gas company Enagas warned last week that it may have to delay or stop unloading LNG by tankers because its storage tanks are nearly full. At least seven of her LNG tankers were docked near the Spanish coast on Tuesday, according to a ship positioning map, but it was not clear how many were waiting to be unloaded.
Despite LNG abundance and falling prices, Loskot-Strachota said the energy situation remained volatile. She warns that the price of gas delivered in December and the winter of 2023 will be higher than it is today.
Russian gas is trickling down through pipelines to Ukraine and Turkey under the Black Sea, but even the tiny amount left could disrupt markets. Or denouncing cuts by refusing to pay in rubles, but European leaders have called it a blackmail to support Ukraine.
The EU government is also working on proposals such as buying gas in bulk and limiting price fluctuations to ease the energy crisis, but the measures will have a big impact on purchases next year.
Gas usage in Europe is down 15%, but in most cases it’s because unprofitable factories simply abandoned production.
“This is dangerous. This will hurt the economy, this will hurt Europe,” said Roscott Strakota.
Whether or not households will participate in cutbacks such as turning down the thermostat and turning off lights cannot be determined until the cold weather is in full swing. Russia’s willingness to destroy Ukrainian heating and electricity plans shows Russia’s readiness to escalate despite its defeat on the battlefield.
The market is also less flexible as gas reserves will increasingly be used as a daily base fuel for heating and power generation rather than as a ‘swing’ fuel during peak demand periods such as cold snaps. .
“All the events, all the problems, the weather problems, the Russia problems, make the price very high,” said Roscott Strakota. “I’m very happy that the situation is calm now, but it won’t last all winter.”
Raquel Redondo contributed from Madrid.
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