The initial stage of the European energy crisis is over. Due to the mild winter, the worst-case risk scenarios were not realized. On the contrary, the price of natural gas on the Dutch stock exchange is lower than it was in December 2021, when there was no threat of a large-scale war in Ukraine.

Lion Hirth, professor of energy policy at the Hertie School in Berlin, said it would best to avoid using the term "crisis" to describe the current situation. Several other analysts have agreed with him. However, energy experts and decision-makers in Brussels are not yet so optimistic.

"First, we are still not completely independent of Russian gas. There are still countries and companies that receive that supply. And all of the natural gas that Russia withdraws from the market, and does not deliver to Europe, disappears altogether from the global market since Russia has no alternative links to other international buyers. And its capacity to liquefy and commercialize natural gas as LNG is limited. Secondly, we had a significant increase in LNG supply from other sources last year, but this was only possible because Asian market demand was lower than usual. Now China is back on the world market as a major customer after the lifting of the Chinese Covid restrictions and this limits our capacity to purchase LNG at a reasonable price in coming years. And lastly, the heating season has not yet over," European Energy Commissioner Kadri Simson explained.

"The fall in gas prices, and therefore electricity prices, should not encourage complacency. Gas will be still in short supply for several years.

"Until there is a major shift in the global LNG market, Europe's gas market will continue to be in a rather precarious position for several more years. For the next few months, and probably even for the next several winters, we should reduce our energy consumption. Just as we are doing today, spontaneously, without any disruption to industries and efficiently. Our gas consumption cannot go back to pre-crisis levels," Simone Tagliapietra, analyst at the think tank Bruegel, said.

Natural gas prices soared to €351 per megawatt-hour last summer, nearly 20 times higher than two years ago and seven times higher than they are now.

Anna Hubert, one of the most influential energy journalists in Brussels, said that the summer price spike was caused by European Commission rules.

"To comply with European Union laws, all countries rushed to the gas market last summer and purchased large amounts of gas at the same time. The stockpile needed to be replenished, which was accomplished by purchasing gas from the market. This was done concurrently, and the competition was fierce. By establishing storage regulations, the European Union set a record price for natural gas, sending the market into a frenzy," Hubert explained.

Even if Europe survives the upcoming winter, excessive energy prices will need to be actively addressed in the long run.

"Energy prices in Europe will remain higher than in the United States for years to come. Much higher. This is a general competitive advantage that we have to take into account. Does it make sense to keep some energy-intensive businesses in Europe? Some of them might not make sense because they do not generate many jobs, and we would prefer to import these energy-intensive components to fill our supply chains with European jobs," Tagliapietra explained.

This is why, in March, the European Commission will propose an energy market reform, the details of which is the subject of much speculation in Brussels.

"It is a multibillion-dollar issue. Everyone is speculating what this reform will entail. We receive a wide range of signals. Because the European Commission wants this to take effect by next winter, in November or December 2023, I believe they must act quickly. And if they want to act quickly, they cannot propose a large, text-heavy overhaul. Otherwise, it would take the co-legislators in Brussels ages to complete their work. Therefore, it must be very focused in order to make a difference next winter," Hubert said.

The person in charge of this, Energy Commissioner Simson, said tactfully that the positive aspects of the current system will be preserved, while the negative aspects will be modified. This could lead to more predictable energy pricing, benefiting both consumers and producers.

"We must also find a long-term solution to protect both consumers and producers in this environment of severe price volatility. We recall many hours of free electricity three years ago, and this situation is not ideal for future investments," she said.

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