February 8, 2023

Athens News

News in English from Greece

Europe parted with a trillion dollars due to rising energy prices

The sharp rise in energy prices associated with the Russian invasion of Ukraine has led to the loss of about 1 trillion in Europe. dollars.

This is reported by Bloomberg – the agency calculated the costs based on market data. It was a trillion dollars, in total, that the increase in the cost of energy for consumers and companies, which was partially offset by aid packages.

Experts predict that the market will remain tight until 2026, even with increased capacity to import liquefied natural gas. No respite from high prices is foreseen until such time as additional manufacturing capacity from the US to Qatar becomes available.

To prevent shortages, the European Commission has set minimum targets for inventories. By February 1, all reservoirs must be at least 45% full to avoid depletion by the end of the heating season. If the winter is mild, then by that time it is necessary to leave the storage level at 55%.

A record level of LNG imports to Europe is recorded, new floating terminals for receiving fuel are opened in Germany. Government support has helped Europe to attract cargo from China. However, cold weather in Asia and a potentially strong economic recovery after Beijing eased Covid restrictions could complicate this task. It is estimated, based on data from China National Offshore Oil Corporation’s Institute of Energy Economics, that Chinese gas imports will be 7% higher in 2023 than this year.

For countries like Germany that rely on affordable energy to produce products ranging from cars to chemicals, high costs mean a loss of competitiveness in favor of the US and China. This puts pressure on the Olaf Scholz administration to maintain support for the economy.

The main challenge is to strike a balance between keeping factories running and heating homes in the near term, while maintaining incentives for investment in renewable energy, which is widely regarded as the most sustainable way out of the energy crisis.

The European Union has enough gas for the winter but could face a shortage next year if Russia cuts supplies further. notes edition. Controversy over proposal to cap natural gas prices in EU intensified as a group of 12 member countries called for a significantly lower intervention limit to limit the impact of the energy crisis on consumers and the business bloc.

As our publication reported, the EU countries finally agreed on limiting gas prices after several weeks of negotiations.

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