Gas prices have reached record highs in Europe, and supplies are running low, prompting fears of the coming winter.
Europe is facing an energy crisis as it prepares for a cold winter. Gas prices have reached record highs, and supplies are low, causing panic.
Here’s what you need to know about the power cuts and what’s coming in the next few months.
What is happening now?
- The continent is struggling with high energy prices as it approaches its winter season.
- One of the main reasons is related to the war in Ukraine. Russia has suspended the supply of natural gas that the continent has used for years to run factories, generate electricity and heat homes.
- Russia provided about 40 percent of the gas used by the European Union through the pipeline, and those exported to other countries have been reduced by 75 percent.
- The country still exports gas to Ukraine and through Turkey and the Black Sea through the TurkStream pipeline, but the prospect of a complete stoppage has come sooner than many expected.
- Russia said this was a natural consequence of economic sanctions imposed on Moscow by the West.
- ” … The main sanctions prevent the maintenance of units, which prevent them from leaving without proper legal guarantees,” Kremlin spokesman Dmitry Peskov said in September.
- As a result, European governments have tried to diversify supply by buying more liquefied natural gas, as well as introducing measures to reduce demand and save energy.
- “Europe does not have any natural resources,” Adam Pankratz, a professor at the University of British Columbia’s Sauder School of Business, told Al Jazeera.
- “They have decided to move away from fossil fuels and not to produce their own natural resources. “Europe actually has a lot of gas, but they decided they’re not going to do that, and they’re dependent on imported Russian gas and oil, and now that it’s cut off, they don’t have a backup plan,” he said. he said.
- The EU imports about 80 percent of its total gas needs, domestic production has halved over the past 10 years. Germany, with its own gas deposits, is banned from fracking, as are France and other countries.
What does this mean for Europeans this year?
- Energy is used for a variety of purposes including transport, households, industry, services, agriculture and forestry. In food production, energy is used for fertilizers, harvesting, freezing and heating.
- Markets related to the dairy and bakery industries have been hit hard because they need energy.
- According to data from the European Commission [PDF]butter prices were up 80 percent in the year to August, while cheese was up 43 percent, beef was up 27 percent, and milk powder was up more than 50 percent.
- Fertilizers have also been hit hard, and their prices have increased by 60 percent annually, putting farmers under economic hardship and cutting off 70 percent of the region’s production.
- As gas and electricity prices rise, millions of Europeans are now spending a record amount of their income on energy. Experts also see “significant levels of fuel poverty”.
- “Fuel poverty happens when people cannot keep their homes warm. And that causes big problems,” Simon Francis, coordinator of the End Fuel Poverty Coalition told Al Jazeera.
- If you have pre-existing health conditions, such as asthma or a heart condition, or are recovering from surgery, or are elderly or disabled and are prone to colds. , a rich home, which can create all pre-existing health conditions,” he said.
- Francis said some disabled people were not charging for their wheelchairs in the summer in the UK because they were worried about whether they would be able to pay utility bills. There were also stories of families starting to try to think of “conversations they’re going to have with their kids about ‘we’re all going to sleep in the same room.’ [to save energy]”, he said.
- According to the International Energy Agency (IEA), in the European Union, Italian and German families are among the hardest hit by rising gas prices.
How bad could the power crisis be?
- Europe has already been able to fill its storage facilities and reach its target of being 80 percent full by November, according to reports. It is likely that the continent has enough fuel to generate energy this winter.
- The region has also looked for alternatives to natural gas supplies, such as liquefied natural gas (LNG) transport, and more pipeline gas from Norway and Azerbaijan. Governments have also adopted measures to help people cope with rising prices.
- However, the continent’s stability depends on having a relatively “normal” winter because when temperatures drop, that could cause demand to rise to levels Europe’s reserves cannot handle.
- “The worst case scenario is a very cold winter in Europe,” Pankratz said.
- “[In this case,] “The worst economic situation is that the European economy is going into a big crisis… because they can’t produce anything, because it’s too expensive… and the government prioritizes sending gas to heat people’s houses over business,” he said.
- “The worst case scenario is that they run out of gas, and people can’t heat their homes, but I don’t foresee that happening,” he said.
- So far, the European Center for Climate Change has said that Europe could suffer a cold, windy and cold winter.
- Experts agree that despite this difficult time, Europe will pass the winter, but the concern is what happens next year.
- “I think there won’t be a big problem to suddenly turn off the lights all over Europe. But of course, there has to be a measure and some understanding that you can’t just live a normal life,” said Carlos Torres Diaz, head of energy at Rystad Energy.
- “Europe says we can go this winter, but the storage is full of a lot of Russian gas. So now, we think that the Russian gas will not come back, and it will be very difficult to fill the storage again next winter,” he said.
- “It’s going to continue to get stronger next year, no matter what happens, because the storage space is going to be empty,” Diaz added.
- Pankratz said Europe needs to think about what to do in the coming years.
- “The problem is not going away … they will have to consider what they are doing in the years to come, where they will have the same problem again, and it will be worse,” he added.
What can we see in Europe next?
- In the current situation, if consumer debt continues to rise, the number of unemployed people increases, and there is a recession, experts believe that this can show on the streets, too.
- Speaking in the UK, Francis said: “There are protests already planned. There’s a whole list of things that the government is doing and not doing, and that’s causing the cost of living and the problem of fuel poverty to get worse, and we’ll see. I think the anger is growing day by day. “
- At this time, while Europe is trying to address the energy crisis and people’s needs, the biggest challenge is the time it needs to create solutions.
- The problem in Europe is that “all solutions [Europe could have], all take time. It takes time to build a pipeline; it takes time to build a nuclear reactor, it takes time to build an LNG terminal,” Pankratz said.
- “And Europe does not have that time. [It’s saying] I want an LNG import facility or a nuclear reactor in a few years; that’s like saying I need it tomorrow morning … It has to happen quickly, and these things are very complicated,” he added.