BAKU, Azerbaijan, June 9. The impacts of higher coal prices and possibly the EU embargo on Russian coal from August 2022 could also increase the need for gas in the mix in the coming weeks and months as countries struggle to replace Russian coal with coal from other sources, Trend reports with reference to Oxford Institute for Energy Studies (OIES).
The OIES report says that all this at a time when the EU and individual countries are looking at options to quickly reduce their gas demand to limit the need for Russian gas imports from 2022 onward.
“In 2022, gas demand response seems to be happening more broadly, in all the three main sectors of gas demand: heating with some -yet limited- change in consumer behaviour, industrial sector with apparent switching to other fuels and in the electricity generation sector with gas to coal switching in the mix. For the rest of 2022, attention should be paid to what happens in the power sector. Coal to gas switching as a result of higher coal prices and the ban on Russian coal imports from August could increase the call on gas-fired plants for the rest of the year.
The availability of hydro and most importantly, the availability of (French) nuclear capacity will also be important drivers for gas demand in Europe in the coming months. Any signs of colder weather in November & December could tighten the market dramatically. Governmental support measures for end-use consumers and businesses (and possible curtailment if need be during the winter, in other words rationing of gas supply which would cause industrial production to be shut down) will also be crucial drivers for gas demand in 2022, and maybe even more so during the winter 2022/23,” says OIES.