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There is a run on camping stoves in the Spanish Balearic Islands, while a major energy analyst says there could be a shortage of gas.
All of this is proof that Europe’s energy crisis is not over yet.
Energy prices rose to the top of the political agenda last month – and were even discussed by EU heads of state and government. The reason was an unexpected increase in natural gas prices combined with the slow production of renewable energies. This led to spikes in gas and electricity prices in many countries – causing outrage from consumers and immediate concern among politicians.
Price concerns eased in October when Russia promised to start replenishing its storage systems in Austria and Germany this month.
But now the unrest is back – and politicians across the continent are helping to stir up a freakout.
Last month, Austria’s Defense Minister Klaudia Tanner was the first national figure to warn consumers that the lights could go out this winter if the energy supply was low. Tanner started a nationwide poster campaign instructing Austrians to prepare for power outages by having 15 days worth of groceries on hand.
“The question is not if there will be a blackout, but when,” she told the press.
Spain was next after Algeria shut down one of its two pipelines supplying the Iberian Peninsula with natural gas in late October. Algiers says it will honor its contracts and the Spanish government exudes an aura of calm about gas deliveries. The Minister for Ecological Transformation, Teresa Ribera, insists that the country has had enough Gas reserves to meet demand for at least 40 days, far more than it should need.
But the conservative regional president of Madrid, Isabel Díaz Ayuso, raises the possibility of blackouts this winter.
“The fear of bottlenecks is real with the people”, called Ayuso, a rising star on the Spanish right.
The Deputy Director of Civil Protection of Catalonia, Sergio Delgado, recently warned that a power failure is “a real possibility”. Although he stressed that the authorities were “calm” and fully prepared for possible blackouts, he also asked the Spaniards to have an emergency kit ready with flashlights, a pipe, warm clothes and canned food.
Ayuso’s statements and the subsequent media speculation about power outages sparked off Panic buying in Spain, with hardware stores reporting a run on camping stoves, flashlights and canned goods. Survivalist supplies were stocked up especially noticable on the Balearic island of Mallorca, on which a large German-speaking population lives, who have been spoken of by power outages from both Vienna and Madrid.
In response to the excited shoppers, Pedro Fresco, the Valencian Government’s Director for Ecological Transition, warned People about “being carried away by conspiracy theories that exploit people’s ignorance” and criticized the media for stirring up panic.
Fresco pointed out that the maximum electricity demand during super storm Filomena, the snowstorm that buried Spain under mountains of snow last January, was 40,000 megawatts.
“We have 113,000 MW generation capacity,” he said tweeted. “Let’s not turn this into a run on the toilet paper markets: it is very unlikely that there could be a general and permanent blackout in Spain.”
But for any person in authority who presses for calm, there is another impending doom. This week, Jeremy Weir, CEO of commodities trader Trafigura, warned that current natural gas supplies are insufficient to supply Europe with cold spells this winter and said people should prepare for it permanent blackouts.
“We don’t have enough gas at the moment, to be honest. We don’t store for the winter period, ”Weir said at the Financial Times Commodities Asia Summit. “So there is a real concern that … if we have a cold winter we could have rolling blackouts in Europe.”
There is a reason to be concerned.
Alongside the shutdown of the Algerian pipeline, there are concerns that the US will keep more natural gas for itself instead of exporting it, which is putting pressure on global liquefied gas markets.
There is also a lack of security with regard to energy supplies from Russia – especially since the US and others are warning that the Kremlin could arm an extended war with Ukraine. Last week, Alexander Lukashenko, the authoritarian leader of Belarus, threatened to cut off the flow of gas from Russia to Poland via the Yamal pipeline in response to the possibility of expanded EU sanctions against his regime due to the growing migrant crisis on the Polish-Belarusian border.
On Tuesday, the German energy regulator’s decision to suspend the Nord Stream 2 pipeline’s certification process shattered gas traders’ hopes that the Russia-Germany pipeline would get approval in time to alleviate winter supply bottlenecks. Spot natural gas prices Exceeded 100 € per megawatt hour at the Dutch benchmark TTF hub on Wednesday – worryingly close to October’s record high of € 116 per MWh. On Friday, a December contract was traded a little lower at € 86 per MWh.
It’s not all bad news.
Russia has promised to increase Austrian and German storage facilities. Gas flows through the TAP pipeline from Azerbaijan to Italy and Greece have increased, and Norway has reinforced Exports to Europe to benefit from the high prices.
But even then, James Huckstep, natural gas analyst at S&P Global Platts, predicted that Western European gas storage facilities would not return to historical levels until November 2022 and end this winter season reduced to 15 percent. The low levels could be a problem for the block in the event of a prolonged cold snap, warned the EU gas network operator group ENTSO-G last month.
Nevertheless, ENTSO-E, which represents the power grid operators of the block, urges calm.
“Blackouts are extreme and very rare events in Europe,” said the group’s spokesman, adding that the last major power failure in Europe was almost two decades ago. Since then, the continent’s grids have been better connected so that electricity and gas can flow between countries without any problems.
Antonia Zimmermann contributed to the reporting.
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