The EU has passed (again) the test of detachment from Russian gas

Once again, Europe managed to get through the winter without relying on Russian gas: stocks are full and prices have returned to normal values. Meanwhile, Gazprom's revenues are falling

Winter is coming is a motto well known to Game of Thrones fans. But winter has been over for a week and for Europe it is time to take stock from the point of view of energy supplies from Russia and other partners. Spoiler: the EU passed the test again.

THE EU CONTINUES TO DETACH FROM RUSSIAN GAS

This is stated by the official data also reworked by ISPI with analyst Matteo Villa: the three elements around which European success in the 2023-24 winter test revolves are full storage, i.e. reserves, the cost of gas and the position increasingly weaker than Gazprom.

Looking at the first element, from the Gie/Agsi data updated to March 26th we can see how Italy has a filling percentage close to 58%, in line with the EU average (58.90%) for a total storage level equal to 712.16 TWh. By November 1st, storage facilities must be 90% full again and closing this season with excellent filling percentages will already accelerate the process for 2024-25.

On the price, the exchange rate at the Amsterdam TTF currently marks a level of around 28 euros per MWh. Villa writes, commenting on this point: “In real terms we are even below the average price of the pre-invasion decade . Of course, volatility is higher, and our projections indicate a balance of €40/MWh in the medium term." The value of the IGI index (Italian Gas Index) for March 28th is €30.39/MWh, up compared to March 27th at €29.13/MWh

Finally, Gazprom. If Moscow tried to route its exports to Asia, between India and China, the energy giant could only lose in terms of economic revenue. Also in February, supplies from the Federation via pipe and LNG to the Old Continent fell by 8.1% on a monthly basis, settling at 4.52bcm.

WHAT COULD HAPPEN NOW

What scenarios, given all this? Now the EU receives 15% of gas from Moscow and soon this percentage will drop to 10%. Italy has long promised to complete the separation from Russian gas at the end of this year. Still at a continental level, at the end of 2024 the gas transit agreement via Ukraine will not be renewed and this on the one hand could cause tensions but on the other it will confirm that the energy separation process is continuing in the right direction thanks to the new partners, the development of renewable sources and mild temperatures which have had a positive impact on prices and consumption.

Looking ahead to the next cold season, analysts and companies reported that the European Union will have abundant gas supplies next winter, and the remaining buyers of Russian gas in Central Europe are working on alternative imports, in case from January transit through Ukraine breaks down.

(Article published in Energia Oltre )

This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/energia/gas-stoccaggi-inverno-ue/ on Sun, 31 Mar 2024 05:58:28 +0000.