BAKU, Azerbaijan, Feb.28. OECD Europe’s gas demand is forecasted to decline by 3% in 2023, Trend reports via the International Energy Agency (IEA).
"This is largely driven by lower gas burn in the power sector, down by close to 15% amid rapidly expanding renewables and improved nuclear availability in France. Industrial sector gas demand is expected to recover by close to 10%. In contrast, a return to average temperature conditions would increase residential and commercial demand by 3%. Assuming the complete cut-off of Russian piped gas supplies and a tighter global LNG balance, steeper demand reduction of 8% would be needed in the European Union," reads the IEA's Global Gas Market Report.
Natural gas consumption in OECD Europe fell by an estimated 13% (over 70 bcm) in 2022 – its steepest decline in absolute terms in history. Record high gas prices led to an unprecedented reduction in gas demand in industry, while milder weather conditions weighed on distribution network-related demand. Over 40% of the reduction in annual demand was concentrated in Q4, when natural gas consumption fell by an estimated 20% (33 bcm) y-o-y. Distribution network-related demand fell by 15% (34 bcm) in 2022, accounting for almost half of the total reduction in OECD Europe’s gas consumption.
Milder weather conditions weighed on space heating requirements, while record high prices incentivised fuelswitching, energy efficiency measures and conservation efforts in the residential and commercial sectors. Q4 2022 saw distribution network-related demand fall by an estimated 20% y-o-y. Unseasonably mild temperatures in October and the first half of November delayed the start of the European heating season by almost a month and led to a steep 30% y-o-y reduction in distribution network-related demand during these months. The short-lived cold spell in the first half of December temporarily increased residential and commercial demand to above 2021 levels, although it was insufficient to reverse the overall demand trend.