Europe’s dependence on gas from the Russian Federation is being reduced by reorientation to other energy sources

Demand for gas in European countries in 2023, contrary to forecasts, continued to decline, according to a report by the International Energy Agency (IEA). Some of the “lost” Russian supplies have been replaced by LNG. The reduction in consumption is also facilitated by the expansion of the use of renewable energy sources and the restoration of nuclear energy production. In fact, the report records that goals to reduce gas dependence are increasingly being achieved through political action, while the role of “random” factors, associated mainly with weather conditions, is becoming less and less significant.

European demand for gas fell in 2023 by 7% (or 35 billion cubic meters), to the lowest level since 1995 – 489 billion cubic meters. m, according to the IEA report on the gas market, published late last week. Russian gas supplies to Europe over the year fell to the lowest level since the early 1970s and amounted to 45 billion cubic meters. m. It is assumed that in 2024 their volume will remain approximately at the same level. Let us recall that supplies began to decline immediately after the start of the military operation in Ukraine; the flow decreased noticeably already in 2022 – to 65 billion cubic meters. m with 140 billion cubic meters. m in 2021.

The reduction in gas consumption in Europe was ensured not only by replacing part of the “lost” Russian LNG supplies, but also by strengthening the role of renewable energy sources (RES) in the energy balance of European countries. It should be noted that the European Union expects that by the end of the decade the share of renewable energy sources in total energy production will be 45% (the bar has been raised several times) – the implementation of “climate” obligations agreed upon at the level of the European Commission has already led to a significant increase in the use of renewable energy sources in Europe. It is expected that over the next five years the number of solar panels and wind power plants in European countries will more than double (for more details, see Kommersant on January 23).

According to the IEA, the reduction in gas consumption was also facilitated by the “nuclear renaissance”, which, however, remains a local trend: in 2023, while nuclear energy production was being restored in France (according to plans, its use should increase by 30% by 2030), in In Germany, the last three nuclear power plants were disconnected from the network. Let us remind you that analysts do not expect a quick and widespread “return to nuclear power”: the process is hampered by both persistent distrust in nuclear energy and serious financial difficulties associated with the high cost of building reactors.

Most of the factors that contributed to reducing dependence on Russian supplies were associated with the decisions of the European authorities to review the role of each of the “components” of the energy balance. Conditions independent of political will influenced the situation to a lesser extent than a year ago. Then, let us remind you that the reduction in gas consumption was largely helped by the warm winter (see “Kommersant” dated April 21, 2023). Moreover, it was expected that European goals to further reduce dependence may not be achieved due to colder winters and hotter summers (see Kommersant, May 3, 2023). Gradually, the role of “climatic” factors becomes less and less significant, and the achievement of goals is increasingly less likely to be explained by a coincidence of circumstances.

However, the situation may be affected by the gradual revival of European industry – we recall that part of the lost Russian gas supplies was actually “compensated” by a decrease in demand due to reduced production, which had a very serious impact on some industries, in particular the production of fertilizers. According to IEA estimates, over the next two years, gas consumption by the industrial sector may increase slightly against the backdrop of a general improvement in the economic situation.

Kristina Borovikova