Natural gas plays a major role in Europe's energy supply. Gas demand in Europe is growing at a remarkable rate, according to a report released last week. And this development will be accelerated over the next five years. This is not only due to market conditions.
It is mainly a result of a coordinated European Union policy in this area.
The report, published by the Oxford Institute for Energy Studies, concludes that the institutional framework of the EU. , including the greenhouse gas emission allowance trading scheme in conjunction with the new rules for power plants, increase the share of natural gas in the European Union's energy mix.
The Demand of Natural Gas
Natural Gas demand in Europe increased by 5% last year. It is the third consecutive annual increase in the series, reaching 548 bcm.
The strongest growth occurred in Germany, France, the United Kingdom, Italy, and the Netherlands. The demand for natural gas in Europe has already increased considerably in the 1990s.
In 2010, it accounted for 25% of energy consumption before declining in the coming years. The decrease was mainly due to the difficulties of security of supply from Russia. However, although these difficulties have not been eliminated, the share of natural gas is rising again due to the European Union's energy policy.
The 2010 EU Industrial Emissions Directive, which set [highlight]energy efficiency requirements and emission limits for power plants,[/highlight] has had significant results according to the aforementioned report. The most important of these is the substitution of coal for natural gas.
Although coal still represents 20% of the EU's energy supply, it is expected to decline significantly over the next five years. The main reason is the decisions to phase out coal in many countries, including France (by 2022) and the United Kingdom (by 2025).
At the same time, the cost difference between gas, coal, and oil is rising. The market stability reserve introduced in the most recent ETS reform will make Europe's electricity production more costly in many cases than its introduction.
And while nuclear power remains the cheapest form of power generation, in the long run, political decisions in several countries, including Germany, restrict its use.
Increased dependenceon natural gas, at the expense of coal and nuclear, will require imports of larger quantities of gas. The preferred supplier for the European Union is Norway. However, based on real conditions, it is a fact that in the near future Russia will remain the largest supplier.
Poland continues to use limited quantities of natural gas and is heavily dependent on domestic coal. The country is concerned about the security of its energy supply and the ability to respond to the new EU institutional framework which favors the use of natural gas. Poland is also the country that reacts most and hinders the approval of the construction of a proposed new gas pipeline from Russia to Germany via the Baltic Sea.
The EUlooks at possible alternatives for gas supplies from the South. This includes the construction of the South Stream gas import project in the EU. from Azerbaijan.
The European Commission, which is the executive of the European Union, has highlighted the benefits of reducing emissions from the transition from coal to natural gas. However, this has caused strong reactions within the Union. Respondents argue that EU legislators are very positive about gas by promoting investment in new projects that will bind the EU. and will cause its dependence on natural gas for many of the years to come. They say that this money should be invested in renewable energy and improving performance.
Prospects for the future
The study of the Oxford Institute predicts a new energy landscape in about five years. After that time, gas is expected to dominate Europe. Energy policy makers and those involved in the energy sector should take this into account when designing their long-term planning.
Bibliography and References
This article is republished in the Greek language article published in Forbes on 30.04.2018 entitled “In Europe, Gas Is King” Dave Keating.
“The Role of Natural Gas, Renewables and Energy Efficiency in Decarbonisation in Germany: The need to complement renewables by decarbonized gas to meet the Paris targets” written by Mr Ralf Dickel – Oxford Institute for Energy Studies
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