As winter approaches in France, gas transporters Terega and Grtgaz assure readiness despite reduced Russian gas supplies due to the ongoing Ukraine conflict. European storage is at 95% capacity, stabilizing prices around 40 euros per megawatt-hour this winter. France aims to maintain low consumption levels to avoid supply deficits. Additionally, the introduction of biomethane and diversified imports enhance resilience, while Russian gas dependency continues to diminish in Europe, demonstrating adaptability amid challenges.
“Winter is upon us,” as famously quoted in the Game of Thrones series. In France, the winter season for gas stakeholders runs from November 1 to March 31. With this period just around the corner, are we prepared to navigate through it seamlessly, especially given the ongoing war in Ukraine and the drastic reduction in Russian natural gas supplies?
Yes, with confidence, say transporters Terega, managing the southwest region, and Grtgaz, overseeing the rest of the country. Recent briefings have revealed that market price fluctuations are now under control, and gas storage levels are at an impressive maximum.
Wholesale Prices Stabilizing Around 40 Euros per Megawatt-Hour
This winter, Europe anticipates wholesale prices to average around 40 euros per megawatt-hour, an increase from the 34 euros recorded last year but significantly lower than the 95 euros per megawatt-hour observed during the harsh winter of 2021/2022. Price volatility has diminished, leading to greater stability. “This is a result of market players’ confidence in European supply,” states Dominique Mockly, president of Terega.
European nations have maximized their storage capabilities, with storage tanks filled to 95% by October 1, a commendable level. “This equates to 1,000 terawatt-hours out of a total storage capacity of 1,110 terawatt-hours,” noted Sandrine Meunier, managing director of Grtgaz. France is similarly positioned, reflecting storage rates comparable to last winter.
France Prepared for Severe Winter Conditions
Thus, we should be able to endure the upcoming months without major issues, even if temperatures drop significantly. However, this depends on the continued energy conservation efforts of the French population. Last winter, consumption saw a decrease of 5%: 2% attributed to milder weather and 3% due to the commitment of manufacturers and citizens to reduce heating.
If conservation measures falter, and should we experience a winter as severe as that of 2012/2013, we might face temporary supply shortages. Hence, it is crucial to maintain high stock levels at the start of the season; the longer reserves remain elevated, the quicker they can meet demands during unexpected cold spells.
Diverse Gas Supplies: Natural Gas, LNG, and Biomethane
On a positive note, our gas supplies are becoming increasingly diverse. A notable contributor is biomethane, primarily generated from the methanization of organic agricultural waste. The biomethane sector supplied 5 terawatt-hours last year, approximately equivalent to the output of a single nuclear power plant, according to Sandrine Meunier.
However, France largely depends on imports for its gas supply. These include natural gas from Norway and the Netherlands, as well as American and, to a lesser extent, Russian LNG, the compressed natural gas that can be easily transported by ship. France is also benefiting from enhanced European infrastructure established in response to the war in Ukraine, with twelve new entry points developed for regasifying LNG, bringing the total number of LNG terminals across Europe to 33. France is taking on an even more significant role in the European gas market, with its terminal at Le Havre supplying gas to Belgium, Germany, and Switzerland.
Reduction in Russian Gas Imports Across Europe
Despite a steep decline in Russian gas imports, as of October 16, they still accounted for 18% of Europe’s total gas supply. This percentage is expected to decrease further due to two upcoming changes. The first change involves the Brotherhood pipeline, which routes gas through Ukraine to Austria, Slovakia, and Hungary, and will cease operations on December 31, when the contract allowing Gazprom to transport gas through Ukraine expires. “This halt will not cause supply disruptions, thanks to well-stocked storage facilities,” reassured Sandrine Meunier.
The second change pertains to Siberian LNG. Previously, Russian LNG vessels were permitted to utilize European ports for transshipment to deliver their cargo to other countries. However,