Jeremy Weir, CEO of commodity trader Trafigura, has warned that current supplies of natural gas will not be able to power Europe through severe cold bouts this winter, saying that consumers should prepare for potentially ongoing power outages as a result.
While President Vladimir Putin had previously raised hopes over Russia providing increased natural gas supplies to European consumers, this promise has not yet been fulfilled and reserves remain insufficient if companies are expected to service the nation through a cold winter.
“We haven’t got enough gas at the moment quite frankly. We’re not storing for the winter period,” said Weir at the Financial Times Commodities Asia Summit,. “So hence there is a real concern that. . . if we have a cold winter, that we could have rolling blackouts in Europe.”
Austrian Defence Minister Klaudia Tanner made a similar caution at the end of October, saying that the question was not if but when a blackout will occur this winter, and warned citizens to prepare for losing electricity, heating, and internet. The country’s military has reportedly begun its preparations for such a scenario.
As the European energy system has begun to phase out coal-fired power stations, the market has come to rely more heavily on natural gas and prices are rising alongside demand as Covid -19 restrictions ease. According to , European spot gas prices were up 8.8% on Monday, rising to €81.60 per megawatt hour.
Russia is a major exporter of natural gas to Europe and plans to open its Nord Stream 2 pipeline hold promise for even more supplies of the resource to flow directly to Germany. A recent halt on certifying the new pipeline from Germany’s end has, however, put something of an obstacle in the way, and there are fears that the pause will fuel escalating tension in the region and potentially jeopardise gas supplies.