According to a German study, gas prices in the EU could fall significantly by 2026 | Company

Published by
Peter Kavinsky

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This is the conclusion of a study published by the Energy Management Institute of the University of Cologne (EWI) on behalf of the German gas association Zukunft Gas. According to the institute, the United States could become the largest gas supplier to the European Union by 2030. Thanks in part to gas from the US, Europe wants to get rid of its energy dependence on Russia.

According to EWI, EU countries took 147 billion of the 361 billion cubic meters of gas from Russia last year, 82 billion from Norway and only 22 billion from the US. As early as 2026, the withdrawal from the United States could reach 130 billion cubic meters with high demand and without the withdrawal of Russian gas. On the contrary, according to the study, the importance of Qatar, with which European states including Germany negotiate imports, will be limited.

Different scenarios

In its model, the institute combined different scenarios for high and low demand for gas, as well as the possibility of full, partial or no involvement of Russia in the gas trade in the EU. The level of demand and the European import capacity will have a share in the price development of this raw material.

“Rapid construction of LNG terminals in Europe will remove import bottlenecks and unify gas prices in Europe and Asia,” union leader Timm Kehler said at a news conference.

But the EWI Institute does not expect wholesale gas prices in Northwest Europe to reach 2018 levels, when they averaged their lowest in 20 years at the virtual trading hub Title Transfer Facility (TTF) in the Netherlands. For this to happen, the institute expects at least partial involvement from Russia in the trade in case of high or low demand. Completely without Russian gas, EWI predicts a return to prices from 2021 to 2026 when demand is low and in 2030 when demand is high.

“However, with global demand falling, the 2018 price level could be reached by 2030 even without Russian gas,” Kehler added.

EWI reports the TTF price level for 2018 at 24 euros (592 CZK) per megawatt hour and 54 euros (1,330 CZK) per megawatt hour respectively for 2021, when it was the highest in the annual average for the past twenty years.

Due to the uncertain supply of gas from Russia, as a result of the Russian invasion of Ukraine and the subsequent Western sanctions, European countries are building LNG terminals. The importance of liquefied gas will therefore be essential for Europe in the future. Last year, gas imports into the EU through gas pipelines amounted to 75 percent, but by 2030 it could fall to 40 percent of total imports.

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Peter Kavinsky

Peter Kavinsky is the Executive Editor at cablefreetv.org

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