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Time to bring back heat shaming

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With gas markets anxious again, is there a cause to bring back the heat-shaming culture that dominated last winter’s conversations?

Last year, heat shaming was prevalent so we asked readers if they were heating yet. With the start of the heating season, it is time to bring back that spirit.

Europe’s gas storage is at full capacity, but many reasons remain to keep the heat off or at least at a low. To the public, the energy crisis is over, as according to the IEA, we heated sparingly and managed to save a stunning seven billion cubic metres (7 bcm) of gas. 

That’s a solid 70 LNG tankers that were not needed by residents keeping the thermostats low – whether by choice or due to financial constraints. 

But there are many other reasons to be frugal when it comes to heating your home.

While behavioural changes managed to accrue significant gas savings, the unusually warm winter played a significant part. Compared to 2021, last year featured 12% fewer “heating degree days,” which slashed gas consumption by 18 bcm – or 180 LNG tankers.

Could this year’s winter be as warm? It’s anybody’s guess although climate change is providing some reason to think it could, notes the EU’s weather service Copernicus.

The good news is that hydropower is largely back to providing ample electricity. Low hydropower production cost Europe an estimated 12 bcm of gas last year. The same goes for France’s ailing nuclear fleet, which is approaching regular output levels. That’s another potential 22 bcm of gas we can save.

Yet, gas traders remain jittery – spot prices at the Dutch TTF jumped by 50% within a week.

What has got them so nervous? Most recently, the Hamas attack on Israel and the subsequent shuttering of gas markets could tighten global LNG markets, Brussels-based think-tank Bruegel warned. While Israel is not a relevant gas exporter to Europe, it supplies some 6 bcm of gas to Egypt, which shipped 7 bcm LNG to global markets.

Globally, LNG markets will be tighter than in 2022. Lower prices and China’s economic recovery are seeing the world’s largest LNG importer’s hunger for gas to grow once more – CNOOC research predicts an 8% surge in demand

In addition, the damage caused by “external activity” to the pipeline connecting the Baltics to Finland reminded gas traders again that infrastructure is vulnerable to potential sabotage.

Should a significant part of the pipelines that connect Norway to Continental Europe suffer similar damage, gas prices could once more climb towards €300 per MWh as they did in August last year. After all, a whopping 122 bcm of Norwegian gas were funnelled through pipelines like Europipes I and II into the continent’s gas network.

And gas traders know best of all that Europe is not as fortunate as Austria – where storage can cover a full year’s demand. If consumption outpaces inflows, the storage politicians proudly proclaim as full will run dry in mere months.

That won’t do as the heating season has started, and we can expect to heat through November into April. 

Cold days could spell trouble, particularly for German industry. Without additional LNG terminals, “only additional conservation efforts will probably be able to avoid a gas shortage in frigid temperatures,” says the energy storage association INES

In the case of the coldest possible winter, akin to the year 2010, Germany would be short of 4 bcm. This, in turn, would drive gas prices up and cause shutdowns in industry. 

So the arguments in favour of heat shaming hold the balance. So whom to believe and what to do? Two key considerations should drive any reader’s decision. 

Energy “sobriety,” as the French would call it, will help the climate and is an excellent mindset to begin with. 

But there is reason to be sceptical about prevailing industry fearmongering. In order to find its results, INES had to draw upon a rather extreme scenario. 

As the economists around the LSE’s Ben Moll found, companies in the gas sector have an outsized incentive to influence gas policy. They also have the ability to do it: Last year, that resulted in surplus gas purchases costing German taxpayers upwards of €7 billion

This year, industry may be incentivised to urge consumers to cut back to keep gas prices as low as possible – and obtain additional state-funded LNG terminals.

If you love your country’s industry and climate action, heat shaming is definitely the way to go.

– Nikolaus J. Kurmayer

BERLIN. Germany’s Habeck calls for ‘Zeitenwende’ on industrial subsidies. In a plea to coalition partners and the European Commission, German Economy Minister Robert Habeck (Greens) called for more subsidies to secure industrial production and jobs. Read more.

SOFIA. Bulgarian parliament threatens to take over control of local Lukoil. Bulgarian GERB and DPS parties have threatened to immediately cut off Russian oil supplies to Lukoil’s Burgas refinery while handing over operational control of its Bulgarian business to the government. Read more.

BRATISLAVA. Slovakia’s Fico to miss out on October EU summit if he sticks with a climate denier. President Zuzana Čaputová refused Robert Fico’s climate change-denying envi-chief nomination, meaning he will have to come up with an alternative if he wants to meet his goal of attending the European Council Summit next Thursday. Read more

SOFIA. Bulgaria ready to negotiate on Russian gas tax, angers Hungary and Serbia. The Bulgarian government will soon hold talks with its European partners about imposing a new tax on Russian gas transiting its territory, it was announced on Wednesday, a move that predictably angered Serbia and Hungary. Read more.

THE HAGUE. Dutch take measures to reduce grid stress. The Netherlands will take “extraordinary” measures to reduce stress on the national grid caused by electricity demand and supply reaching similar levels, such as proposing incentives for large companies to use less electricity at peak times, outgoing Dutch Energy Minister Rob Jetten (D66/Renew) announced on Wednesday. Read more.

VALLETTA. EU funding for Melita gas pipeline in doubt despite government claims. Despite government claims that plans for a gas pipeline between Malta and the rest of the EU are underway, an EU official said its inclusion on a list of possible projects to be funded was not yet certain, and even then, question marks over whether funding would be granted remain. Read more.

PRAGUE. Czech government plans coal phase-out by 2033 and oil and gas by 2050. The Czech government has approved a draft revised National Energy and Climate Plan (NECP), which aims to phase out coal by 2033 and oil and gas by 2050. Read more.

OCTOBER (TBC according to Commission VP Šefčovič’s letter to Parliament):
European Declaration on Cycling 
Regulation on preventing microplastic pollution (plastic pellet)

25 OCTOBER. Parliament ITRE committee vote on Net Zero Industry Act
26-27 OCTOBER. European Council
NOVEMBER (TBC according to Commission VP Šefčovič’s letter to Parliament):
Mobility package: Communications on common European mobility data space, Revision of package travel, Review of passengers’ rights framework
Revision of the Combined Transport Directive
Action plan to facilitate grids roll-out

20 NOVEMBER. Packaging and Packaging Waste Regulation voted on in plenary this week
20 NOVEMBER. Net Zero Industry Act on in plenary this week
21 NOVEMBER. Forest monitoring framework
30 NOVEMBER-12 DECEMBER. UN Climate Change Conference (COP 28), Dubai
DECEMBER (TBC according to Commission VP Šefčovič’s letter to Parliament):
Protection of animals during transport

14-15 DECEMBER. European Council
18 DECEMBER. Environment Council
19 DECEMBER. Energy Council
Q1 2024 (TBC according to Commission VP Šefčovič’s letter to Parliament):
Communication on carbon storage technologies
2040 Climate target communication
Communication on water resilience

[Edited by Alice Taylor and Frédéric Simon]

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