HomeMediaLatest NewsA gas price ceiling: the EC fantasies do not match reality

A gas price ceiling: the EC fantasies do not match reality

14 September 2022

Belogoryev Alexey M. Research and Development Director, Director of the Center for Energy strategic analysis and forecasting

Alexey Belogoryev, Deputy Principal Director on Energy Studies of the Institute for Energy and Finance, commented to BaltNews on whether the energy crisis in the EU will lead to a partial abandonment of green energy development goals.

As Alexey Belogoryev noted, the EU is taking emergency measures during the energy crisis. But this is not only happening in Europe. For example, in Asia, fuel oil generation is now being massively restored. This is due to high gas prices. Now it is more profitable to use almost any type of energy resources than "blue fuel".

"Return to "dirty" energy in Europe has been observed since the price of gas has risen. This will continue as long as the cost of "blue fuel" remains abnormally high. Moreover, even if gas drops to $800, this will still not be enough "Also in Europe, these trends are exacerbated by the risks of a physical shortage of gas during the heating period. Today, there is no shortage of "blue fuel" in the EU, on the contrary, there is even a surplus against the background of full UGS facilities. However, in the winter period there are risks of a short-term shortage. The most difficult situation is in Germany and Eastern European countries that do not have access to LNG supplies," Belogoryev said.

"This situation in Europe will continue at least until the beginning of 2025. It is during this period - at the turn of 2024 and 2025 - that several new LNG plants should enter the market, primarily in the United States. After that, a steady surplus will be established in the LNG market ", after which prices should fall. But in the next 2.5 years, the energy crisis will continue. However, this does not mean that the EU is abandoning the low-carbon agenda. On the contrary, the programs that have been adopted in Europe since March are based on the accelerated introduction of renewable energy. Much attention is paid to forced production of biomethane and hydrogen," he added.

According to him, a partial return to coal generation and other "dirty" energy cannot be considered a rejection of the "green" agenda.

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