Natural gas to remain EU's electricity price benchmark until 2023
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Draghi stated that in 2022, natural gas was the price setter 63% of the time, accounting for 20% of the EU's energy mix.
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Italian Premier Mario Draghi meets the media in Rome on July 12, 2022 (AP)
Natural gas will continue to be the baseline for power rates in the European Union until at least 2030, regardless of the bloc's green transition initiatives, according to Mario Draghi, special advisor to European Commission President Ursula von der Leyen.
During an address to the European Parliament plenary session, Draghi explained that "The EU's electricity price benchmark is natural gas, and it will remain so until at least 2030, regardless of the bloc's green transition efforts."
Draghi stated that in 2022, natural gas was the price setter 63% of the time, accounting for 20% of the EU's energy mix.
According to Sputnik's data analysis from the Bruegel consultancy, the EU lowered its imports of pipeline gas by 1.2% to 200.2 billion cubic meters and LNG by 15% to 77.05 billion cubic meters between January and August 2024.
Gas inventories fell to 85% capacity in early January, marking a stark decline from the 98% capacity reported in October. The cold weather gripping the region spurred increased consumption of fuel for heating, putting an intense strain on gas reserves.
Renewable energy sources, particularly wind turbines, experienced a decline in December, meeting only approximately 15% of the EU's energy requirements (after it had covered one-third back in 2021). Experts reportedly anticipate a further reduction in renewable energy generation due to weak winds, increasing the dependence on natural gas for energy, thus putting extra strain on the gas reserves.
This natural gas crisis in Europe follows the onset of the NATO-Russia confrontation in Ukraine back in 2022.
