IEA chief Fatih Birol in warning over European gas storage

A German gas storage facility photographed in September 2022. European countries are trying to wean themselves off of Russian gas following the invasion of the Kremlin in Ukraine.

Krisztian Bocsi | Bloomberg | Getty Images

The executive director of the International Energy Agency said on Wednesday that while Europe’s gas storage facilities were near full for this winter, the next could pose a significant challenge.

Asked about a meeting of the Economic Council of Finland, Fatih Birol said that almost 90% of gas storage facilities in Europe are full.

“I would have preferred European countries to be much more flexible, much… quicker to respond to our recommendations,” he told reporters, referring to the IEA’s 10-point plan for how to reduce Europe’s dependence on Russian gas after the invasion of the Kremlins could be reduced Ukraine.

“But where we are is not bad and I expect if there are no surprises – political and technical surprises – and if the winter is … a normal winter, Europe can get through this winter with a few bruises here and there, but we can.” February and March are coming to us.”

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At this point, Birol said inventories are likely to be down to 25% to 30%. “So the question is how do we go from 25% or 30% to again [for the] Winter 2023… 80-90%?”

“What helped us this time [is that] We have still imported some gas from Russia in recent months,” he said. In addition, China “imported less gas than it would otherwise have done”, which Birol described as “very sluggish economic performance”.

The scenario, Birol said, could change in 2023, particularly with regard to China. “Next year, when Chinese gas imports rise with the return of China’s economy, so it will be [a] quite difficult months from March until next winter.”

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“So this winter is difficult, but next winter could also be very difficult,” he said, adding that preparations for the latter period should start today.

Birol’s comments come at a time when Europe is scrambling to secure energy supplies as the war in Ukraine rages on.

According to Eurostat, Russia was the largest supplier of oil and gas to the EU last year, but in a report published on Monday, the IEA said gas exports from Russia to the European Union had fallen sharply this year.

“Despite available production and transport capacity, Russia has reduced its gas supplies to the European Union by almost 50% year-on-year since the beginning of 2022,” according to the Paris-based organization’s latest Gas Market Report.

“In the current context, the complete cessation of Russian pipeline gas supplies to the European Union ahead of the 2022/23 heating season cannot be ruled out – when the European gas market is most vulnerable,” the report added.

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In a sign of how challenging the current situation is, energy company Orsted recently announced that it would continue or resume operations at three fossil fuel plants after being asked to do so by Danish authorities.

In a statement over the weekend, Orsted – whose main stakeholder is the Danish state – said the direction was made “to ensure security of electricity supply in Denmark”.

A few days before Orsted’s announcement, another major European energy company, Germany’s RWE, said three of its lignite or lignite units would “return temporarily [the] Electricity market to strengthen security of supply and save gas in power generation.”

RWE said each of the units has a capacity of 300 megawatts. “Your assignment is initially limited to June 30, 2023,” it said.

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