BAKU, Azerbaijan, March 29. Gas demand destruction in industry has been great, and some of that demand will not return, said Didier Holleaux, President of Eurogas, Executive Vice President Engie and Regional Coordinator of the International Gas Union (IGU), Trend reports.
“High prices have cut industrial gas demand in Europe as a whole by around 26 percent, and in some countries the reduction has been as much as 40 percent. These declines are the result of energy efficiency, fuel switching and demand destruction, as some plants have simply halted production because they or their customers cannot afford the high cost of energy,” he said.
Holleaux pointed out that S&P Global estimates 27 percent of this demand destruction (i.e. 7 percent of the European industrial gas demand) will not come back.
“We know from experience that energy efficiency cannot achieve more than a 3 percent demand reduction on average per year. This means that 2022 alone has seen the destruction of roughly 4 percent of the industrial gas demand (plants closed down indefinitely or relocated outside Europe), because of the energy crisis,” he added.
Didier Holleaux went on to say that the rest of the demand is expected to be restored, as there is fuel switching in the opposite direction, and plants temporarily closed are restarted.
“In the residential sector, even if most of the countries have put in place protection measures to avoid households to pay very extreme prices, the combination of high prices and strong incentives to save energy has led to a significant reduction of gas demand. As far as gas-to-power is concerned, the situation has been very different across Europe, as gas-fired power plants have generally been the balancing tool of the power market, and therefore very active when and where hydro, wind and nuclear output has been low,” he explained.
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