This was one of Europe’s main concerns after the invasion of Ukraine on February 24, 2022: will we have to do without Russian gas, and if so, how? ” It is impossible to do without it immediately », confirmed on the same day the CEO of French major Total Energy, Patrick Pouane. It must be said that the old continent then appeared trapped: its first gas supplier, until now, remained the country led by Vladimir Putin with 40% of total imports (and also 60% for Germany). Enough to give Moscow a comfortable source of income, as Twenty-seven still rely on these hydrocarbons to heat themselves, run their factories or generate electricity.
Two years later, however, the cards seem to have changed. Certainly, the European Union still consumes 15% of Russian gas (8% supplied by pipeline, 7% by ship), this energy source has not suffered any trade retaliation. But in recent months, its prices have fallen to very low levels, close to pre-crisis levels. And for good reason: from the beginning of 2022, Europeans are consuming less and less… whether it comes from Russia or elsewhere.
“Despite the absence of sanctions, the war in Ukraine has profoundly changed their relationship with fossil energy, which is seen as a major geopolitical weapon,” estimates Phuc-Vinh Nguyen, a researcher on European and French energy policies within the Energy Center of Jacques Delors. institution.
A “colossal” reduction
Indeed, European gas demand has fallen by 20% since Russia’s massive invasion of Ukraine, the think tank IEEFA (Institute for Energy Economics and Financial Analysis) shows in a brand new report published this Wednesday. either “It’s the lowest level in ten years », with the largest declines in Germany and Italy and, outside the EU, in the United Kingdom, the document states. ” That one Fallback Enormous », comments by Phuc-Vinh Nguyen.
At the end of November, the International Energy Agency had already underlined that the Ukrainian crisis ” marked a turning point » For gas consumption in Europe, which ” should fall more Data from the Bruegel Institute confirmed this, showing that gas demand in Europe fell by 12% in 2022, then by 18% and 20% in the first and second half of 2023, respectively, compared to the period 2019-2021. Orders of similar magnitude communicated on December 7 in the quarterly report on
” Since thenThe market was really soft because no one expected such a decline », explained a few weeks ago Nicolas Leclerc, co-founder of Omnegy, an energy consulting firm for businesses and communities.
Especially between 2014 and 2021, the trend was not downward, quite the opposite.
Above all, this impressive reduction in consumption exceeds the objectives set by the Twenty-seven after the invasion of Ukraine: in July 2022, member states agreed to voluntarily reduce their consumption by 15% compared to the five-year average. fossil fuels between August 2022 and March 2023. In France, according to GRTGaz, national gas consumption fell by 25% between August 1, 2023 and February 18, 2024, compared to the same period in 2018 and 2019.
Prioritize energy sovereignty
Of course, Russian aggression is not the only reason. ” There are also circumstantial factors associated with the weather: the past two winters, particularly mild ones, have been lucky fellows. », underlines Phuc-Vinh Nguyen. In addition, the integration of more renewable energy for ecological reasons has also played a role, as there is a challenge to reduce the use of fossil fuels (including gas) in Europe. but” The war in Ukraine has added an important consideration, which now takes precedence over climate: energy sovereignty within a complex geopolitical framework. », Phuc-Vinh Nguyen continues.
Thus some Europeans have rationalized their uses without entering into the logic of deprivation. ” Many of them have realized that burning the desk in the evening is not useful, e.g.ple,” explains the researcher. But the 2022 price increase is, inevitably, also a balancing weight.
” Like electricity, the war in Ukraine made gas too expensive, leading to austerity by many, in addition to these efforts by some. », notes Thierry Chapuis, Deputy Director in charge of Economic Players at GRDF and former General Delegate of France Gaze.
Destruction of demand
However, at this stage, it is difficult to identify precisely what the choice or constraint is. Especially since the reasons for the decline in demand vary from one country to another. While in September 2023, Europe’s gas demand was 22% below the 2019-2021 average, this was mainly due to a fall in household consumption in Germany (-43% compared to -25% in France) and a reduction in gas consumption. Gas use in electricity generation in France (-46%, compared to -16% across the Rhine). The reason: In recent months, Germans have implemented measures to forcefully electrify home heating, which is still largely dependent on hydrocarbons. While France, for its part, was able to rely more on its nuclear fleet to provide it with low-carbon electricity after the bottlenecks experienced in 2022.
It also remains to be seen to what extent producers are forced to under-consume. According to Bruegel’s figures, their gas demand has actually decreased, an average of 22% in September 2023 compared to 2019-2021 (-19% in France, – 25% in Germany). But even here, it seems difficult to distinguish what resulted from better energy efficiency (not affecting production) and what might be related to “demand destruction” (industries that slow down or close production chains because energy becomes too expensive or too volatile).
” We wonder whether there has not been a structural destruction of industrial demand, particularly in Germany, more affected than in France. This country is paying the price for its policy of dependence on Russian gas, but we cannot rejoice in its troubles because it is the economic engine of the EU. », underlines Phuc-Vinh Nguyen.
Rebound effect or structural phenomenon?
Overall, moreover, one question remains: When will this decline in demand stop? In other words: is this a fundamental movement, or should we expect a rebound with lower price returns? It continues to fall: On the main European exchange called the TTF (Title Transfer Facility), prices fell to 23.7 euros per megawatt hour (MWh) on February 19, 2024. From November 2023 the decline was almost constant, away from 55 Euro/MWh. As a reminder, prices peaked at 277 euros/MWh at the end of August 2022, before fluctuating between 80 and 50 euros/MWh during 2023.
“Under these conditions, manufacturers can restart the stopped machines. And for individuals, we cannot rule out the kind of fatigue associated with containment efforts, two years after the start of the war,” notes Phuc Vinh-Nguyen.
Conversely, if gas consumption continues to decline, Europe will face another risk: overcapacity in terminals to import liquefied natural gas (LNG) transported by ship, which twenty-seven currently mass off their coasts to replace Russian deliveries. Building in a way. gas pipeline. Since Ukraine’s invasion, in fact, the old continent has put into service a total of 36.5 billion cubic meters (bcm) of new capacity, and plans 106 bcm of additional LNG import capacity over the decade. This would bring total capacity to 406 bcm in 2030… or nearly three times the LNG demand by this time frame, the IEEFA think tank had already warned in late October.
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