But if you start to understand the reasons for the price reduction, not everything seems so rosy. The main reason is the unusually warm winter even for Europe. Against the background of this climate, the occupancy of European underground gas storages (UGS) in mid-winter is above 80%, i.e. more of the UGS were filled at the beginning of the 2021-2022 heating period. In fact, this means that even if frosts hit Europe now, it will be possible to get through them without big savings.
The second reason is the wind, which finally subsided after almost a year of calm. Its participation in the total generation of the EU is, according to WindEurope, higher than 25%. A year ago it did not exceed 13%.
The third reason is the successful creation of a new infrastructure to receive liquefied natural gas (LNG) to replace Russian pipeline gas. According to Kirill Rodionov, an expert at the Institute for the Development of Complex Fuel and Energy Technologies, by July 2022, 9 LNG regasification terminals with a total capacity of 88 million cubic meters per day were being built in the EU, in addition to The already operate 28 terminals for 447 million cubic meters per day. By way of comparison: the average daily import of gas into the EU in the last year fluctuated around 1,000 million cubic meters per day.
On the other hand, none of these events have solved Europe’s energy problems, which means that prices can rise again at any time. The reason may be a banal cold snap or calm in the North Sea.
Due to problems with gas exports to Europe from Russia, LNG has become a very rare commodity around the world, its volumes clearly not sufficient to meet the needs of all consumers. And that means prices will go up. In addition, Europe will have to compete in this matter with the market of the Asia-Pacific region (APR), which are used to high prices for it. But Europe, with the exception of the last two years, is more used to cheap gas from Russia.