Eurozone | After a bad year, EU power sector’s gas use is set to drop

Better fundamentals and fewer operational setbacks should lower gross gas use by the EU’s power sector by 200TWh (5% of total gas consumption) next year, enhancing the bloc’s energy security. Renewables and nuclear should drive the supply side improvement, but risks remain.

What you will learn:

• Together with our cautiously optimistic baseline view on gas in 2023, this should weigh on gas prices and contribute towards another winter without hard energy rationing.
• Downside risks to power supply are weather-related and operational, as droughts and problems with France’s nuclear fleet demonstrated.
• After doubling down on the renewables rollout in May and agreeing on a windfall tax on inframarginal producers in late September, more significant interventions in wholesale electricity markets at the EU level are proving hard to agree.