Clean energy transition is not responsible for gas price hike in Europe, Trend reports with reference to the International Energy Agency (IEA).
“The steep rise in European gas prices has been driven by a combination of a strong recovery in demand and tighter-than-expected supply, as well as several weather-related factors. These include a particularly cold and long heating season in Europe last winter, and lower-than-usual availability of wind energy in recent weeks,” reads the IEA statement.
The agency believes that European prices also reflect broader global gas market dynamics.
“There were strong cold spells in East Asia and North America in the first quarter of 2021. They were followed by heatwaves in Asia and drought in various regions, including Brazil. All of these developments added to the upward trend in gas demand. In Asia, gas demand has remained strong throughout the year, primarily driven by China, but also by Japan and Korea. On the supply side, liquefied natural gas (LNG) production worldwide has been lower than expected due to a series of unplanned outages and delays across the globe and delayed maintenance from 2020,” said the IEA.
IEA Executive Director Fatih Birol pointed out that recent increases in global natural gas prices are the result of multiple factors, and it is inaccurate and misleading to lay the responsibility at the door of the clean energy transition.
Going forward, the European gas market could well face further stress tests from unplanned outages and sharp cold spells, especially if they occur late in the winter, according to the agency. “Gas storage levels in Europe are well below their five-year average but not markedly below their previous five-year lows, which were reached in 2017.”
Source: TREND News Agency