Eesti Energia: Unexpectedly cold winter could bring power cuts to Europe
If Europe is faced with an unexpectedly cold winter the continent may experience power cuts this year, Eesti Energia's market analysis strategist Olavi Miller said in a recent report. He said that one way to combat this is for Finland to get its LNG terminal up and running as soon as possible.
It does not matter whether the LNG storage vessel is based in Estonia or Finland as long as it is in working order so gas can start to arrive, the expert said. A delay could make all the difference between power cuts this winter or not.
"If Inkoo is delayed, it would be in the Finns' own interest for the first LNG loads to be sent to Paldiski, if possible. 2.5 TWh of gas could be imported in three weeks which could be the deciding factor in whether or not there will be a blackout in Finland this winter," he wrote in Eesti Energia's energy market overview.
"In comparison, the Latvian gas storage facility, where the Baltic and Finnish reserves are located, is currently 13 TWh or 54 percent full. According to Elering, with limited electricity generation in Estonia, consumers should also prepare for blackouts lasting a few hours."
The German government is already warning of blackouts and the United Kingdom has the lowest reserve capacity for seven years, he wrote.
Some scientists have forecast a warmer-than-usual winter for Europe, but others speculate the winter in China will be cold which will push up demand and prices of LNG.
"This year, the Chinese have bought less than usual. However, European gas storage has reached an average fill rate of 91 percent," Miller said.
The expert wrote Russia is also still benefiting from the sales of fossil fuels. Natural gas is also flowing to Europe as LNG and the country is the world's fourth largest producer.
"Russia is forecast to set a record for LNG exports this year. Compared to last year, countries such as Spain, Belgium and France have bought more LNG from Russia. Natural gas supplies via Ukraine are still operational," Miller wrote.
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Editor: Barbara Oja, Helen Wright