Emphasis on ‘hot air’ lottery to Europe experiencing energy crisis

Mild weather in Europe this winter has reduced demand for natural gas, filling up gas reserves and pushing prices almost to pre-war levels. Russian President Vladimir Putin’s plans to squeeze Europe by using energy as a weapon have been shelved, at least for the time being.

On the other hand, the moderate and dry climate brought with it the fear of drought and the threat of a decline in the production of agricultural products.

“As far as we can see, a possible economic danger with the collapse of European industry has been averted for now,” German Economy Minister Robert Habeck said in an interview with energy press.

REDUCES THE CONSUMPTION OF NATURAL GAS

Benchmark gas prices fell to a fifth of their record level in August, and gas use continued to decline amid weakening economic activity, despite concerns the cheaper price could boost demand.

In a report on the subject, US investment bank Morgan Stanley forecast that Europe will consume 16 percent below the five-year average level in 2023.

DANGER NOT PAST

The climate crisis has contributed to the reduction of heating demand problems so far in winter, but despite the optimism created by mild weather, cold snaps may be triggered again due to increasingly volatile weather.

Energy analysis firm Wood Mackenzie predicted that a potential cold snap could cut storage rates by as much as 20 percent. “Europe may be in a better position than feared, but the danger is not over yet,” the report said.

THE GREAT CRISIS OCCURRED BECAUSE OF THE WAR

The energy crisis, triggered by the Russia-Ukraine war in February last year, has already cost Europe close to $1 trillion due to rising energy prices. Governments have donated more than $700 billion to help businesses and consumers absorb the blow. In addition, the states tried to ease their dependence on Russian natural gas.

The European Union (EU) stopped importing coal and crude oil from Russia and gas shipments dropped significantly. The EU increased the amount of gas from Norway and shipments of liquefied natural gas (LNG) from countries like Qatar, US However, growing concerns about gas storage have already been put to one side with optimism from the state of spirit.

drought DANGER

Although warm winter weather looks positive for the energy market, it brings with it another danger. While the mild winter rapidly increased the size of the global drought threat, its most striking effects were seen on the European continent this summer.

According to the report “Drought in Europe 2022” prepared by JRC, it focuses on the possibility of the worst drought in the last 500 years occurring across the continent. According to the July 2022 drought report published by the Center, including England, 44 percent of European land is facing the threat of drought.

While 44 percent of EU land is at the “warning” level and 9 percent at the “alarm” level, Italy is the most drought-affected country in Europe. The most severe drought on the continent is experienced in the Po River basin in this country.