What do experts predict from the price of gas and electricity in Europe?
What is the reason for the increasing demand for gas and electricity in Europe?
How much has the price of renewable energy risen in Europe since the outbreak of Covid-19?
What is the cause of the energy crisis in Europe?
After an unprecedented period of experiencing the limitations of Covid-19 pandemic disease, with the reduction of quarantine conditions and the arrival of vaccines, the world began to adapt to this situation. Predictions and efforts for the expected economic recovery were key, but at the same time, the historic energy price crisis and its aftermath took us by surprise with the dramatic rise in electricity, gas, oil and coal prices, especially in Europe. The surprise that with the arrival of the last hours of 2021 has become a threat to 2022. The energy crisis in Europe has worried many experts.
Unfavorable situation of global renewable energy
2021 In addition to being an unfavorable year for meteorological phenomena and consequently its negative effects on renewable energy production, geopolitical tensions with Russia, declining investment in energy during the Covid-19 epidemic, rising emissions per ton of carbon emissions The EU has plunged the world, and especially European countries, into an energy crisis that is unprecedented since the 1970s.
Europe has been facing an energy crisis in recent months, following a sharp rise in gas prices and a sharp rise in demand following the lifting of restrictions on Covid-19’s disease, which, according to European media, is still a “big nightmare of energy prices”. The energy crisis in Europe will affect many countries in the coming months and will have negative consequences.
Forecasts of rising electricity and gas prices in Europe
The energy crisis in Europe comes as forecasts suggest rising gas and electricity prices in Europe next year. Electricity and gas prices in Europe will become much more expensive in 2022, and futures market surveys show that electricity prices are rising dramatically per MWh. The world is facing energy shortages. The recovery of economic activity after a period of severe outbreaks of Covid-19 and rising demand, despite years of low investment by countries in fossil fuels, has led to energy shortages today. On the other hand, Europe’s vast network of renewable energy sources has also faced problems in recent months, as low wind speeds mean a further decline in production per year.
Continuing energy crisis and rising inflation
As Europe’s energy crisis continues, electricity prices will rise to the highest level, pushing up inflation and raising electricity bills for millions of households and industrial centers across the continent, with electricity prices up about 11% next year in Germany and 7.7% in France. European companies will also be forced to burn more gas, coal and even oil to keep the lights on. This instability and price mismatch has caused the cost of living in the EU to rise by about 5% compared to last year, which is unprecedented since the statistics were recorded.
Rising food and transportation costs
Exorbitant gas and energy prices will also add to rising food and transportation costs. Inflation in the UK could reach 5% early next year, said Ben Broadbent, the BoE monetary policy chief. Should that happen, a UK energy regulator called Ofgem will allow utility companies to raise their prices for consumers in April.
Increasing global gas demand
The International Energy Agency (IEA) estimates that global gas demand will increase by 3.6 percent this year, and it is likely that this increase in demand by 2024 will reach 7 percent more than in the pre-Covid 19 period. Global gas demand fell 1.9 percent in 2020 as the economic downturn slowed due to the recession and shutdown of economic activity.
Reducing gas production in Europe
Under such conditions, meteorological forecasts indicate the occurrence of very cold and long winters in the Northern Hemisphere; Unlike 2020, when the inhabitants of the northern half of the world experienced a shorter, colder winter. At the same time, European gas production is declining. Several gas fields in the North Sea are drying up, and Groningen’s reserves in the Netherlands, Europe’s largest gas field, are shrinking and gas production is expected to cease by mid-2022.
Europe is forced to import gas
This makes Europe increasingly dependent on gas imports. The EU supplies about 90% of its natural gas from outside the EU, with Russia being the largest exporter of natural gas to the EU, accounting for 43.4% of imports from outside the EU in 2020. After Russia, Norway (20%), Algeria (12%), the UK (5.5%) and the US (5%) were the largest suppliers of imported gas to the European Union.
Rising gas prices in Europe
Natural gas is the second most consumed fuel in the 27 EU member states after oil and petroleum products. Accordingly, following the growth of demand and the reduction of production, the price of European gas in 2021 has increased by 600% so far and is now about four times higher than last spring. The latest data released by the Eurostat, the rise in natural gas prices, inflation (3.4%) in the Euro zone countries to the highest level in 13 years.
Concerns about rising greenhouse gas emissions
Rising gas prices have raised concerns in the EU that European energy consumers will lose faith in the development of clean energy as energy prices continue to fluctuate, and that a plan to reduce greenhouse gas emissions could be severely hampered. Accordingly, incentives for home consumers to use solar panels to generate cheaper electricity have increased, and governments and electricity distribution companies have begun a new effort to persuade consumers to take interest-free loans to install solar panels and sell surplus production at incentive rates.
The European energy challenge continues as the continent’s gas reserves reach their lowest level in 10 years. Severe winters can lead to severe energy shortages and the closure of a large part of the European economy. The European energy crisis could have irreversible effects on the economies of EU countries. Russia’s shortage of natural gas supply and the problem of increasing Norway’s gas supply are threatening Europe’s energy situation. In addition to the natural gas crisis, the European continent is facing a decline in nuclear power generation in France with the onset of winter, which will exacerbate the continent’s energy crisis.
