BAKU, Azerbaijan, July 13
By Leman Zeynalova – Trend:
EU gas consumption in the first quarter of 2020 decreased by 5 percent in year-on-year comparison, after going up by respectively by 7 percent and 2 percent in the previous two quarters, Trend reports with reference to the European Commission.
“In absolute numbers, the quarterly gas consumption in Q1 2020 amounted to an estimated 130.8 billion cubic meters (bcm), increasing from Q4 2019 (117.7 bcm), but down from (137.1 bcm) in Q1 2019,” EU Commission said in its Gas Report.
Gas-fired electricity generation showed a minor year-on-year decrease in Q1 2020 (decreasing by 1.8 percent, or 2.4 TWh), reversing the growing trend observed in earlier quarters in many European countries.
Weather across Europe was generally warmer in January-March 2020 compared to the seasonal average, resulting in less heating-related demand for gas in the residential sector. The decrease in gas demand in the electricity generation sector was aggravated by the decreasing industrial demand induced by the Covid-19 lockdown measures in the last weeks of the quarter. However, during the whole Q1 2020 gas consumption was in the range of 2014-2019.
Besides the aforementioned mild weather conditions and decreasing use in electricity generation, natural gas demand also decreased in the industrial sector. Starting at the end of February in Italy, and by the end of March gradually expanding in whole Europe, confinement measures, severely impacting movement of persons and economic activity, were introduced in order to curb the spreading the Covid-19 coronavirus, which has already impacted other parts of the world (especially China in Asia) since the beginning of 2020. Looking at the year-on-year change in gas consumption in March 2020, in Italy and Spain, both heavily impacted by the confinement measures, a decrease of 4 percent and 6 percent could be observed.
In Q1 2020 gas wholesale prices turned down again in Europe, which could have been beneficial for gas use in power generation. However, besides the demand related impact, stemming from mild weather conditions and limited demand for gas in the industry, in Q1 2020 the role of renewables in the EU power generation mix was particularly strong, leaving not too much room for gas in spite of decreasing fuel costs. Solar and wind generation in the EU was up, respectively by 84 percent and 19 percent in Q1 2020, compared to the first quarter of 2019, and solid fuels continued their falling trend, decreasing by 30 percent over the same period . Although carbon prices decreased measurably in Q1 2020, reaching 22.8 €/tCO2e on average, this could not improve the competitiveness of fossil fuels, especially that of coal and lignite in power generation in the EU.
---
Follow the author on Twitter: @Lyaman_Zeyn