BAKU, Azerbaijan, April 19. The depth of an economic downturn (and which countries might be affected) and governmental interventions in subsidizing energy bills in particular, support measures for large energy intensive industries, will continue to be crucial drivers for gas demand in 2023/24, as well as, of course, the prices of gas but also electricity and the EU ETS allowances, Trend reports with reference to the Oxford Institute of Energy Studies (OIES).
OIES analysts believe that keeping gas demand low will be a key goal in 2023 in preparation for Winter 2023/2024.
“How much more could be reduced in the industrial and heating sectors is uncertain, at least without any major impact on economic activity and consumers’ wellbeing. Gas demand remained low in the first quarter of 2023 (down 14 per cent in Q1 2023 compared to Q1 2022), but the fundamentals in the three main sectors seem to point toward a potential increase in gas consumption this year rather than a flat (or indeed a further decline) gas consumption. All in all, the fundamentals point to an increase in gas demand in 2023, with a possible recovery of about five per cent (20 bcm),” reads the latest OIES report.
The report reveals that key issues to watch closely for the rest of 2023 and 2024 include the pace of return of French nuclear reactors, but also coal-to-gas switching and the level of hydropower across Europe, both of which could (partly) counteract the effects of the French nuclear return.
“The willingness and ability of large and small consumers to continue to adapt their usual behavior in order to use less energy (especially during cold days in the winter), and as a result, the level of temperatures, will be important: cold temperatures would likely derail most demand-response in the heating sector, though the trigger point and the impact are never going to be uniform across Europe due to differences in weather, buildings, and in the role of gas for space heating.”
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