Russian natural gas exports to Europe declined by more than 50 percent from 2021 to 2022, leading to surging prices. Senior partners Namit Sharma and Thomas Vahlenkamp and colleagues find that the shock to the energy market was met by a change in behavior from consumers, whose demand for household gas declined, even after taking into account the milder winter.
Image description:
A series of 4 paired bar charts represent 4 European countries. The first bar of each pair shows the expected use of natural gas in European households from September to December 2022, in billions of cubic meters, and is compared with a second bar showing the actual usage. In each case, actual demand is lower than expected demand, and from largest to smallest, the gaps are as follows: UK, 3 billion less than expected; Germany, 2.6 billion less; Italy, 2.4 billion less; and France, 1.3 billion less.
The expected demand has been adjusted for heating days, with demand reduction attributed to behavioral change, which is estimated as the difference between expected gas usage corrected for the warmer weather minus the actual 2022 gas consumption.
Source: Bundesnetzagentur (the German regulatory office for electricity and gas), Degree Days, and Platts.
End of image description.
To read the article, see “A balancing act: Securing European gas and power markets,” April 25, 2023.
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