Experts are now warning about complacency as the war in Ukraine continues — and further energy shortages loom
Crisis? What crisis? After months of fretting about the prospect of crippling shortfalls in energy supplies over the winter, as the flow of Russian fossil fuels to Europe turned into a trickle, the continent suddenly — and surprisingly — finds itself with more energy in its storage facilities than it had anticipated.
There have been no large-scale blackouts or widespread energy shortages. Crisis averted. For now.
A big factor that helped: the weather. Higher than usual temperatures across Europe meant that fears of a sudden spike in usage, as people cranked up the heating, never materialized. Demand has also been lower as a result of higher energy costs, and governments have imposed restrictions that helped boost gas storage levels across the continent, which helped Europe make it through the winter months. Europe-wide gas storage is expected to stand at more than 54 percent full at the end of winter, significantly above the average of 35 percent over the past 12 years.
“Overall, things have developed much better than many people had feared,” Franziska Holz, an energy expert at the German Institute for Economic Research, told Grid. “All the arrangements to secure supply that were in put in place really helped.”
But several experts told Grid that Europe’s energy challenge is far from over. That’s because another season — and a different nightmare scenario — looms.
It’s going to be “a rougher summer than much of Europe is prepared for,” Suriya Jayanti, an energy policy expert based in Washington and former U.S. diplomat, told Grid.
While the warmer-than-usual winter has helped — average temperatures in Europe in January were 2.2 degrees Celsius higher than the 1990-2020 average — last summer was hotter as well. And a hot summer can bring just as much pressure to the energy picture as a cold winter.
Hydropower — which suffers as temperatures rise and water levels in reservoirs fall — has accounted for roughly 17 percent of Europe’s electricity in recent years. A drop-off would hurt. And extreme heat will likely drive usage higher.
But these aren’t the only risks. European policymakers have managed to cut their dependence on Russian fuel — from around 45 percent of the continent’s gas imports to under 13 percent — and in the process boost European gas storage facilities to more than 90 percent full. But a lot of that gas came from Russia itself.
“About 20 percent, 30 percent of the gas in storage was Russian,” Ben McWilliams, from the Brussels based Bruegel think tank, told Grid. And in 2023, that gas supply has mostly dried up.
The upshot of all this: Even after this winter, Europeans still have an energy problem on the horizon.
The summer weather forecast …
It seems a safe assumption: Given the pattern — an unusually hot summer in 2022 and the atypically warm winter that followed — Europe should be gearing up for another baking summer season. And the energy crisis that would come with it.
The truth is that it’s hard to know. Even the most sophisticated forecasting cannot predict where the mercury will be, come July and August. And from a climate perspective, the remarkably warm winter in Europe doesn’t translate automatically to a hotter-than-normal summer forecast.
“There’s not any meaningful skill in predicting the summer weather over Europe based on the mild winter we’ve experienced,” said Richard Allan, a professor of climate science at the University of Reading in the U.K.
But the broader trends are unmistakable: Along with the rest of the planet, Europe has been experiencing unusually extreme levels of heat. Last summer was the continent’s hottest on record. And climate change means these trends — and the devastation they bring — are likely to persist.
“A warming climate due to human-caused rises in atmospheric greenhouse concentrations will progressively intensify the severity of heatwaves, droughts and flooding events,” Allan told Grid.
Another thing Europe and the rest of the world can count on: the impact of Pacific Ocean weather patterns. The La Niña pattern is likely to end in 2023, after several years of helping cool the entire planet. And while it may not flip to an El Niño just yet and start pushing the globe further into record territory, the Pacific will at least see a neutral pattern that will still exert a warming influence compared to the last couple of years.
And that, of course, raises the prospect of another exceptionally hot, dry summer.
… and the summer energy forecast
That bad news on the weather front would mean bad news when it comes to energy.
Last summer’s extreme heat was a case in point. Hydropower generation fell precipitously in several parts of Europe. In Italy, it plummeted by almost 40 percent. In Spain, drought drove water reserves to their lowest levels since 1995. Over the first nine months of 2022, this resulted in Spain generating 48 percent less hydroelectricity than the previous year.
As the head of Enel, the European energy firm, warned investors last summer: “The situation is extremely dry in Europe.”
A repeat of such pressures would make it harder for Europe balance its energy books, so to speak. Higher energy usage, less hydropower and less Russian gas supplies all amount to a difficult calculus for Europeans this summer.
Europe has Russia and China problems
Another potential problem — getting storage levels back up in time for next winter — has roots in other parts of the world.
Europe has set new targets for countries to refill their storage levels to 90 percent or higher ahead of the next winter period. But that’s likely to be a much tougher target to hit than it was last year, according to a recent warning from the International Energy Agency (IEA).
“The process of filling EU gas storage sites (in 2022),” the IEA wrote, “benefited from key factors that may well not be repeated in 2023.”
One of those factors is the loss of the high volumes of Russian gas. But another reaches far beyond Europe: the resurgence of economic activity — and thus energy demand — in China.
Over the course of 2022, China’s economy was still constrained by Beijing’s “zero-covid” policies. That meant China was consuming far less liquefied natural gas (LNG) than usual — and that, in turn, allowed Europe to buy up LNG from the international markets to help plug the shortfalls caused by the drop-off in Russian gas.
Now, China has dropped nearly all its covid restrictions, and the economy is reopening. And the IEA says that if China’s LNG appetite recovers to the levels seen in 2021, that would “capture over 85 percent of the expected increase in global LNG supply.” In other words, there could potentially be less gas for Europe.
If Russian gas supplies fall to zero, and China’s LNG consumption rises in this way, Europe could find itself with a severe shortage of gas to fill those storage facilities.
“With the recent mild weather and lower gas prices, there is a danger of complacency creeping into the conversation around Europe’s gas supplies,” the IEA’s Executive Director Fatih Birol warned in November. “But we are by no means out of the woods yet.”
Optimism — or complacency?
Still, analysts say there are reasons for optimism. European policymakers have made significant strides in helping the continent live without Russian supplies, including boosting the continent’s capacity to consume LNG instead of gas coming down the pipeline from Moscow.
Holz, from the German Institute for Economic Research, says such measures have left Europe better prepared for 2023 — for both the summer and winter.
In other words, the crisis hasn’t gone away, but a core lesson from the past several months is that Europe has shown an ability to live without the high levels of Russian energy supplies it had grown used to in recent years.
“We did not see the fall in output that many had predicted,” she said. And when it comes to the demand from China and how that might affect Europe’s ability to get the LNG it needs, she said European policymakers have shown that they are willing to pay what they need to secure the supplies they require.
But these are assumptions — and the assumptions about a coming winter energy crunch never materialized.
Jayanti, who, during her time as a U.S. diplomat worked with Ukrainian officials on energy security issues, said there’s another variable that isn’t front and center right now — but that could upset the energy balance in Europe.
As Grid has reported, Europeans responded well to calls to restrict their energy use — perhaps because they understood and accepted their governments’ warnings about a cold winter and the need to cut back. Some may have cut usage simply because gas prices had spiked.
Now, however, you might say the mood has changed.
“The complacency borne of everybody thinking that they dodged the bullet this winter also means that some of the consumption reductions are probably not going to carry through,” Jayanti said. “So they’re going to have to completely reeducate the masses again.”
Will it work the second time around? We cannot know. But looking back, it’s clear that during the winter Europe, wasn’t just helped by what its policymakers did. Luck, Mother Nature and attention to the issue of energy security — all these also helped the continent blunt Russia’s energy weapon. In many ways, the question now, as the war in Ukraine continues and the days get warmer, may be a simple one: Will Europe get lucky again?