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Misfortunes do not come singly: European heatwave is the start of a winter energy showdown between Europe and Russia

2022-07-19T06:52:10.157Z


The heat wave sweeping across Europe is causing serious wildfires in France, Spain, Portugal and other countries. In Italy, rivers are drying up and glaciers are collapsing. Residents in cities and towns need to be evacuated. Some people die of heatstroke.


The heat wave sweeping across Europe is causing serious wildfires in France, Spain, Portugal and other countries. Rivers are drying up and glaciers are collapsing in Italy. Residents of cities and towns around the world need to be evacuated. , There are even more videos circulating on the Internet showing the danger of the passengers on the train surrounded by wildfires on both sides.

Heat waves and wildfires have recently become real symbols of climate change.

However, this heat wave symbolizes the beginning of the energy confrontation between Europe and Russia this winter.


According to statistics from the International Energy Agency (IEA), Russia's natural gas exports to Europe have fallen by more than 70% compared with the same period last year.

Whether the Russian-German "Nord Stream I" (Nord Stream I), which entered the annual maintenance last week, will re-transmit gas on Thursday (July 21) as scheduled, is a development that Europeans are paying close attention to - Nord Stream I The annual gas transmission capacity accounts for more than one-third of European Gazprom imports.

Gazprom was sanctioned last month for sending turbines for repair, slashing the transmission of Nord Stream 1 by 60 percent.

Uniper, Germany's largest importer of Gazprom, said on Monday (18th) that it had received a notification from Gazprom, which cited "force majeure" as the reason for its inability to fulfill the gas transmission contract.

Although the text of the letter has not been made public, the Guardian quoted people familiar with the matter as saying that the "force majeure" reason was related to the supply of Nord Stream 1.

This could signal that the Nord Stream 1 will not re-transmit gas as scheduled this Thursday, or that it will only deliver gas at a much lower level than before.

The German government has indicated that if the Nord Stream 1 stops gas transmission on Thursday, the authorities will declare a state of emergency, with the government controlling the energy market and more likely to implement energy rationing.

In France, which has long been "killed" by Russia, President Emmanuel Macron last week indicated preparations for a complete shift away from Russian gas.

Heat wave hits gas storage

According to real-time data, the European Union's overall natural gas storage is about 64%. The immediate impact of Russia's gas cut is limited. The question is whether Europe has enough natural gas supplies to cope with the surge in heating demand this winter.

The EU has set a target of reaching 80% of its natural gas storage by November 1.

The current heat wave, coupled with a slump in imports of Russian gas, which may even stop, makes this goal even more difficult to achieve.

On the one hand, the current heat wave immediately increases the energy demand for air conditioners.

Enagás, Spain's national gas company, noted that its gas-fired power transmission has reached a level not seen in 14 years.

High energy demand will reduce countries' ability to increase natural gas storage.

Uniper announced that it was using natural gas reserves to meet its supply contract after the North Stream 1 was cut off.

On the other hand, the heat wave further hit France's nuclear power generation, undermining the country's plan to use nuclear energy to help other countries with 75% of its electricity.

Since some nuclear power plants need to use river water to dissipate heat, the increase in the temperature of the river water caused by the heat wave increases the difficulty of heat dissipation, which leads to the restriction of production of nuclear power plants.

The French grid company also said that the country is relying on electricity imports from Spain, Italy, Germany, Belgium and the United Kingdom to make up for the shortfall in nuclear power.

Daily Russian gas supplies to the EU from January 2019 to July 2022.

(IEA)

EU leaders 'beg for breath'

Under the gloom of the cut-off of Gazprom, European leaders are rushing to "beg for gas".

European Commission President Ursula von der Leyen went to Azerbaijan on Monday to sign a new gas supply contract, increasing the country's natural gas supply to Europe from 8.1 billion square meters (bcm) last year to 12 bmc this year. , and increase to the level of 20bcm per year by 2027.

Italian Prime Minister Mario Draghi, who is likely to fall this week, took six ministers to visit Algeria, North Africa, on the same day. Algeria is expected to supply 20bcm of natural gas to Italy this year).

At the same time, French and Italian energy giants also signed a US$4 billion natural gas development project in Algeria.

Also on the same day, French President Emmanuel Macron and UAE President Mohamed bin Zayed Al Nahyan, who visited Paris, signed an energy cooperation agreement, which is expected to increase the UAE's diesel supply to France.

Demand reduction is inevitable

However, non-Russian gas is not enough to fill the Russian gas void.

According to an analysis released by European think tank Bruegel earlier this month, the European Union will need to reduce its energy demand by 15% in the next 10 months (relative to the 2019-2021 average) in order to cope with the impact of Russia’s supply cuts, and the introduction of liquefied natural gas Replacing Russian gas has reached its limit.

The EU is turning to trustworthy energy suppliers.



Azerbaijan is one of them.



With today's agreement, we commit to expanding the Southern Gas Corridor, to double gas supplies from Azerbaijan to the EU.



This is good news for our supplies of gas this winter and beyond. pic.twitter.com/j1sVcv10z6

— Ursula von der Leyen (@vonderleyen) July 18, 2022

The International Energy Agency warned on Monday that even if the European Union can reach 90% of its natural gas storage by this winter, it is assumed that Nord Stream 1 on Thursday only returns to the level of supply that had been reduced last month, and that Russia starts in October. If the gas supply is completely cut off, the EU's gas reserves will fall below 20% in February next year, and there will be a higher risk of supply disruption.

The International Energy Agency believes that the EU must reduce its natural gas demand by 12bcm in the next three months, which is equivalent to the carrying capacity of 130 LNG ships.

The European Commission will announce plans this week for member states to immediately reduce natural gas demand, showing that the EU is also eagerly heeding calls from think tanks and energy agencies.

"The worst economic crisis since World War II"?

The economic shock to the EU could be catastrophic if it fails to make it through this winter with policies such as reducing demand.

UBS predicts that if the gas supply to Nord Stream 1 fails to resume, industrial activity in Germany may drop by 30% to 60%, and GDP may drop by 6% by the end of next year.

Martin Brudermüller, chief executive of BASF, the world's largest chemical giant, has warned that if Russia's natural gas supply is cut off immediately, it could trigger the worst economic crisis since World War II.

The company's largest plant will be forced to suspend production amid a halving of natural gas supplies.

German steel plants are more likely to fail to resume production after energy cuts.

Countries with lower industrial energy needs, such as France, or Spain, which has ample maritime LNG infrastructure, may not be immune.

On the one hand, German chemical products are highly integrated with the industries of other EU countries. More than 60% of German chemicals are imported from other EU countries, and more than half of German chemicals are also sold to manufacturers in other EU countries.

Chain effects are unavoidable.

On the other hand, climate problems on the other side of the Atlantic, like the European heat wave, may also hit Europe's energy supply, such as the hurricane season in the Caribbean Sea, which may hinder the export of liquefied natural gas from Texas.

At this moment, the EU has firmly stood on the road of aid to Ukraine. Unless there is a dramatic change in the battlefield, it is difficult for the EU-Russia relationship to improve in the short term.

This year's energy supply crisis has become the primary challenge that the EU has to face.

The only fortunate thing is that although the percentage of EU failures is not low, this EU-Russian energy battle is only a one-time confrontation. If the EU can survive this winter, the EU will generally be able to solve the problem of dependence on Russian natural gas next summer. .

Russia-Ukraine conflict | Draghi resigns Italy Political crisis or destroys EU united front War in Ukraine blocks grain exports to Europe, heat wave hits agriculture, global food supply worsens, annual maintenance of Beixi No. 1 is suspended

Source: hk1

All news articles on 2022-07-19

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