BAKU, Azerbaijan, Jan.14. Wood Mackenzie anticipates lower gas demand in power in Europe for 2023, Trend reports with reference to the consulting company.
“The average output from nuclear and hydro will only slightly improve, with EDF targeting 315 TWh, compared to 280 TWh in 2022. However, production from wind and solar is expected to increase by 60 TWh, which, combined with muted electricity demand growth, will help reduce gas usage by 4 percent in 2023,” reads the latest report released by WoodMac.
The consulting company estimates that European gas demand reduced a record 50 bcm (10 percent) in 2022. The industrial sector was worst hit, falling 17 percent. This will continue in 2023.
“European industries will face a more adverse macroeconomic outlook and as pre-war hedges expire, more large industrial buyers will face exposure to high spot prices. We forecast industrial demand to decline a further 9 percent. Gas demand in the residential and services sectors declined by more than 12 percent in 2022. Partly, this was driven by warmer-than-average weather. However, we estimate that up to 8 percent of the reduction can be attributed to behaviour change in how households have used heating in the high-price environment,” reads the report.
As government support schemes for energy bills are reduced or refocused to just low-income households, Wood Mackenzie expects behavioural change will intensify.
“Therefore, we estimate residential demand for 2023 to be similar to that of 2022, despite assuming colder temperatures and in line with average weather conditions. Gas demand in the power sector increased by 2 percent in 2022 due to reduced nuclear and hydro production. Overall, we anticipate total European gas demand to drop by 15 bcm, with more risk on the downside.”
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