Goldman Sachs has presented a nightmare scenario for the European economies if Russia cuts off natural gas supplies, noting that electricity and gas bills for households will rise to 500 euros per month!
And what decision did the Greek government make in this case? Went to ease sanctions? No, it has decided to increase imports of expensive US LNG. In particular, the decision of the Ministry of the Environment provides jump in energy costs by about 65% compared to today, when the price per megawatt-hour is already at an unimaginable height, exceeding 170 euros.
In this case, the average European household, consuming about 3 MWh of electricity and 15 MWh of natural gas per year, will have to pay about 5650 euros per year for electricity and natural gas, i.e. 470-500 euros per month.
According to Goldman Sachs, this price will be increased by 300% (!) compared to the summer of 2020.
Concerning European industrythen it will face an increase in energy costs of about 65% in the event of a cessation of Russian gas supplies, losing competitiveness compared to the United States, which, in fact, started all this …
As Goldman Sachs emphasizes, further price increases for already expensive energy cut profit margins for European energy industries, such as, for example, energy, chemical industry, glass, paper, metallurgical, cement, ceramic industries. At the same time, it is possible that some industries that consume large volumes of natural gas will be forced to reduce production, or even close.
Compared to 2020, Goldman Sachs estimates total costs for industries increased by almost 200%according to the regulatory body ARERA.
Wherein Germany and Italy heavily dependent on Russian gasare already facing serious energy shortages, and it is very likely that if Moscow turns off the tap, approximately 65-80% of their industrial production will be at risk of bankruptcy.
In Germany, in particular, a complete shutdown of Russian gas supplies will have long-term and significant implications for the country’s energy security. He estimates that the largest European economy will face a shortage of about 20 billion cubic meters of gas annually, which will affect about 65% of its industries, unless, of course, measures are taken to reduce consumption.
Government of K. Mitsotakis: “We will bring additional shipments of LNG.” government plan for phasing out Russian natural gas and a contingency plan (after first essentially causing the dismantling of the lignite blocks that made us self-sufficient), in the event of a cessation of supplies from Russia, presented by the Minister of the Environment and Energy Kostas Skrekas US Ambassador to Greece George Tsuniswith whom he had his first official meeting today.
During the meeting, according to the Ministry of Foreign Affairs, the excellent atmosphere of cooperation between the governments of the two countries in the field of energy was confirmed. Since the US Ambassador acknowledged the key role that Greece plays in the independence not only of itself, but of the whole of South-Eastern Europe because of Russian natural gas.
Mr. Skrekas emphasized the importance of the terminal regasification of liquefied natural gas in Alexandroupolis and interconnector between Greece and Bulgaria, which was opened last week in Komotini, highlighting, based on data for the first half of the year, that the share of Russian gas in our import structure decreased by 21%, while the share of liquefied natural gas, respectively, increased by 48% compared to the same period last year.
The Greek minister stressed to the American ambassador that liquefied natural gas currently accounts for 44% of the final consumption of natural gas in the country, and 60% of all liquefied natural gas imports come from the US, with a potentially increasing trend.
Mr. Skrekas, together with the US Ambassador, reviewed the overall energy security situation in EU, caused by a reduction in Russian gas flows through the Nord Stream 1 gas pipeline, the opening of which (unless Moscow decides otherwise) is expected on July 21. The minister presented the main aspects of the national emergency plan in case of interruptions in the supply of Russian natural gas to Greece, assuring that all necessary measures have been taken to ensure the country’s energy supply through a set of actions.
- increase in the production of domestic production of brown coal,
- readiness to transfer 5 power units from natural gas to diesel fuel,
- increase in both storage capacity and regasification capacity of Revitusa with the addition of a floating tank (FSU).
Finally, Mr. Skrekas presented the country’s strategy in the field of electrical connections, focusing on the planning initiated with Israel, Cyprus, Egypt, Italy, Albania, and Bulgaria, where the second Nea Santa Maritsa line is expected to be completed no later than beginning of next year, which will expand the possibilities of importing electricity from a neighboring country.