...

EU to deeply change gas and power market design – IGU

Oil&Gas Materials 12 October 2022 14:03 (UTC +04:00)
EU to deeply change gas and power market design – IGU
Laman Zeynalova
Laman Zeynalova
Read more

BAKU, Azerbaijan, October 12. The situation in European gas market will most likely remain very difficult until at least 2027 as little significant new sources of gas/LNG can be put in service before then, Trend reports with reference to the International Gas Union (IGU).

IGU report reveals that it is highly probable that the EU will deeply change the gas market (and possibly the power market) design as it has proven not to be efficient in such a crisis.

“It is highly possible that some consolidation of the gas industry will happen in the years to come, as well as a reshaping of the gas flows to Europe. The jury is out for now whether this will slow or accelerate the European energy transition. The energy transition could accelerate the decline of natural gas in the energy mix, but it may accelerate the development of green gas: biogas, syngas, hydrogen,” note IGU analysts.

IGU notes that the impact of market disruptions on gas companies has been serious.

“For all players in the market, the fuel costs are 10 times what they used to be, requiring billions in cash. In most countries the ceiling applied to prices for households is borne by the companies for their customers, even if they are backed by the government. The companies hit by disruptions in supply under their long-term contracts, particularly in Germany, Italy, Austria, and others in Central Europe, had no choice but to buy the gas they were committed to deliver to customers at very high prices on the spot market. Some gas companies were in such trouble that governments had to step in with support to prevent them defaulting and creating a domino effect.”

---

Follow the author on Twitter: @Lyaman_Zeyn

Tags:
Latest

Latest