The energy freakout in Europe – POLITICO

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There is a leak on camping stoves on Spain’s Balearic Islands, while a key energy analyst says there could be gas shortages.

This is proof that Europe’s energy emergency is not over.

Energy prices have climbed to the top of the political agenda last month – even under discussion by EU leaders. The reason was an unexpected surge in natural gas prices coupled with sluggish renewable energy production. This has seen gas and electricity prices soar in many countries, prompting cries of outrage from consumers and immediate concern from politicians.

October pricing concerns eased when Russia pledged to start restocking its storage systems in Austria and Germany this month.

But now the concern is back – and politicians across the continent are helping to fuel a panic.

Austrian Defense Minister Klaudia Tanner was the first national figure to warn consumers last month that low power consumption could cause the lights to go out this winter. Tanner has launched a nationwide poster campaign asking Austrians to prepare for power outages by keeping 15 days of food on hand.

“The question is not whether a blackout will happen, but rather when,” she told reporters.

Spain was next, after Algeria closed one of its two gas pipelines at the end of October supplying the Iberian Peninsula with natural gas. Algiers says it will fulfill its contracts, and the Spanish government is projecting an aura of calm over gas supplies. Ecological Transition Minister Teresa Ribera insists the country has enough gas reserves to cover at least 40 days of demand, far more than it would need.

But the conservative regional president of Madrid, Isabel Díaz Ayuso, raises the possibility of power cuts this winter.

“The fear of shortages is real among people,” said Ayuso, a rising star on the Spanish right.

Meanwhile, Catalonia’s deputy director of civil protection Sergio Delgado recently warned that a power failure was “a real possibility”. Although he stressed that the authorities were “calm” and fully prepared for any power outage, he also urged the Spaniards to keep an emergency kit with flashlights, a whistle, warm clothes and cans.

Ayuso’s statements and subsequent media speculation about the blackouts sparked panic buying in Spain, with hardware stores reporting a leak of camping stoves, flashlights and canned goods. The storage of survival supplies has been particularly visible on the Balearic island of Mallorca, home to a large German-speaking population that has been exposed to rumors of blackouts coming from both Vienna and Madrid.

In reaction to the frantic buyers, Pedro Fresco, director of the Valencian government for the ecological transition, warned people get “carried away by conspiracy theories that exploit people’s ignorance” and criticized the media for fueling the panic.

Fresco pointed out that the maximum amount of energy needed during Super Storm Filomena, the snowstorm that buried Spain under mountains of snow last January, was 40,000 megawatts.

“We have 113,000 MW of production capacity,” he said. tweeted. “Let’s not turn this into a race to the markets to buy toilet paper: it is highly unlikely that a widespread and lasting blackout could occur in Spain.”

But for every authority figure who calls for calm, there is another prediction of impending doom. This week, Jeremy Weir, CEO of commodities trader Trafigura, warned that current natural gas supplies are not enough to power Europe during cold spells this winter, saying people should prepare for blackouts. durable current.

“We don’t have enough gas at the moment, quite frankly. We don’t stock for the winter period, ”Weir told the Financial Times Commodities Asia Summit. “So there is therefore a real concern that… if we have a cold winter, we could have power outages in Europe. “

Supply voltages

There are reasons to be concerned.

In addition to the closure of the Algerian gas pipeline, there are fears that the United States is keeping more natural gas for itself rather than exporting it, adding to the pressure on global liquefied natural gas markets.

There is also a lack of certainty about energy supplies from Russia – especially as the United States and others warn that the Kremlin may be preparing for an expanded war with Ukraine. Last week, Alexander Lukashenko, the authoritarian ruler of Belarus, threatened to shut off gas from Russia to Poland on the Yamal pipeline in response to the possibility of increased EU sanctions against his regime in due to the growing migrant crisis on the Polish-Belarusian border.

On Tuesday, the German energy regulator’s decision to suspend the certification process for the Nord Stream 2 pipeline dashed hopes among natural gas traders that the Russia-Germany pipeline would get approval in time to help ease the winter shortage. On Wednesday, spot prices for natural gas surpassed € 100 per megawatt hour at the Dutch benchmark TTF hub, which is worrying near the October record high of € 116 per MWh. On Friday, a December contract traded slightly lower, at € 86 per MWh.

It’s not all bad news.

Russia has promised to supplement Austrian and German storage. Gas flows through the TAP pipeline from Azerbaijan to Italy and Greece have increased, and Norway has boosted exports to Europe to take advantage of the high prices.

But even then, James Huckstepp, natural gas analyst at S&P Global Platts, predicted that gas storage in Western Europe will not return to historic levels until November 2022 and will end this winter season at 15%. The low levels could be a problem for the bloc in the event of a prolonged cold snap, EU gas network operator group ENTSO-G warned last month.

Despite this, ENTSO-E, which represents the power grid managers of the block, calls for calm.

“Power outages are extreme and very rare events in Europe,” the group spokesperson said, adding that the last major grid outage in Europe occurred almost two decades ago. Since then, the continent’s grids have been better connected, allowing electricity and gas to flow easily between countries.

Antonia Zimmerman contributed reporting.

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