Economic analyst Rachel Morrison:
The energy crisis in Europe is getting worse with the onset of winter
Putin will not be able to pump more gas to Europe.
AFP
Snow covered a vehicle of construction machinery in an area near Frankfurt, Germany, which faces the possibility of an energy shortage this year.
Reuters
Snow covers a farmer in the village of Kelly after a snow storm hit Staffordshire, Britain, heralding a very cold winter.
Reuters
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The last weeks before the arrival of winter saw energy prices in Europe set successive records, which means that the worst is yet to come for the European energy market, as the winter season witnesses a traditional rise in energy demand on the continent.
And the significant rise in energy prices in Britain, during the past month, prompted some industrial companies to reduce their production, and asked for government assistance, which is a harbinger of what could happen in Europe on a large scale, at a time when the continent is struggling to overcome the repercussions of the Corona virus pandemic. Novel Corona.
And an economic analyst specializing in energy markets, Rachel Morrison, warns of the possibility of a state of tension spreading among European countries, if governments are forced to act to protect their countries’ energy supplies, with the possibility of resorting to asking consumers to rationalize energy consumption, or cutting off electricity periodically in some Countries.
"Demand drop"
It is unlikely that a solution to the current energy crisis in Europe based on increased supplies will be found soon, as Russian companies are not pumping more than they have to pump natural gas, while Qatar says it is producing maximum As much as it can from liquefied natural gas, the European energy industry will have to rely on “reduced demand” for energy to face the crisis.
"We have seen this scenario over the past few months, in many sectors, and the strongest possibility is that this decline will continue and intensify, as continuing to work in the current market conditions is no longer profitable for many companies operating in the European energy sector," Rwengen added.
The energy crisis comes to add to the suffering of Europe, which is fighting the epicenter of the emerging Corona virus pandemic, with the high number of HIV infections, and fears of the new mutated strain that was detected in South Africa, known as “Omicron”.
Restrictions aimed at curbing the spread of the virus have been tightened in some countries, while consumer budgets suffer from high inflation.
On top of that, the cold weather in winter can turn off the lights in Europe.
Also, the re-imposition of some countries, such as Austria, with closures due to "Corona", could reduce energy demand, although a few governments want to return to the closure.
France is in danger
According to the analysis by Rachel Morrison, published by Bloomberg News Agency, France, which is the second largest economy in Europe, is basically at risk. The possibility of the country being exposed to freezing waves during January and February raises the concerns of the country's electricity network operators.
The possibility of increasing the production of nuclear power plants, which is the backbone of the French electricity sector, is limited, because the pandemic postponed maintenance operations for some reactors, according to a report published on November 22.
Energy prices also rose to their highest levels, with expectations of their continued rise, as a result of the increased demand for them with the intensification of the winter cold.
“If the temperatures cool down and the winds go down, things could get worse with a shortage of nuclear power plants and the recent closure of a number of coal-fired power plants,” says Nicolas Goldberg, senior director of energy at Columbus Consulting in Paris. ».
France is a major source of electricity for neighboring countries, which means that the effects of the crisis will extend to Germany, Spain, Italy and Britain.
At the same time, stocks of fuel used to heat homes and generate electricity are lower than usual, and are being rapidly depleted.
Analysts warn that natural gas stocks in Europe may reach zero during the winter, if cold weather increases demand for energy.
Warning
And the CEO of the Swiss group Trafigura Group for commodity trading, Jeremy Fayer, warned that European countries would resort to periodic power cuts to counter the lack of fuel supplies.
"If the weather gets too cold in Europe, there will not be an easy solution on the supply side, and the solution that is needed will be on the demand side," said Adam Lewis, partner at Hearty Partners.
As for the supply component, any movement with Russia's side will be key.
Although Russian President Vladimir Putin indicated a few days ago that his country would pump additional quantities of gas to Europe to stabilize the market, the increased supplies are still less than their levels last year.
Also, the new Nord Stream 2 gas pipeline, which will transport natural gas from Russia to Germany via the Baltic Sea, did not obtain the necessary approvals to start its operation, despite its operational readiness.
Qatar, the world's largest exporter of liquefied natural gas, says its production has already reached its maximum capacity.
Qatar has ordered the purchase of six additional LNG carriers from South Korea, in addition to the four tankers it purchased from China last October.
And if things deteriorate further, countries may resort to limiting natural gas exports to other regions.
And in the worst-case scenario, European countries could stop exporting gas or electricity from one country to another, provoking political crises on the continent and harming the economy.
Finally, the current energy crisis will be a test of the principles of solidarity that underpin the European Union, and is supposed to prevent any member state from stopping the export of energy or natural gas to another country facing shortages, especially when the supplies are for domestic use.
• He increased the possibility of a state of tension spreading among European countries, if governments were forced to take action to protect their countries' energy supplies, with the possibility of resorting to asking consumers to rationalize energy consumption, or cutting off electricity periodically in some countries.
• Extremely cold winter weather can turn off the lights in Europe. Also, the re-imposition of some countries, such as Austria, with closures due to "Corona", could reduce energy demand, although a few governments want to return to the closure.
• Although Russian President Vladimir Putin indicated a few days ago that his country will pump additional quantities of gas to Europe to achieve market stability, the increased supplies are still less than their levels last year.
• If the temperatures drop and the wind strength declines in France, things may become worse in light of the shortage of available nuclear power plants, and the closing of a number of coal-fired power plants recently.
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