By Chrysostomos Tsoufis

May 2022…

With the Russo-Ukrainian war raging since February 24, the price of natural gas has quadrupled to €72/Mwh and we have yet to see the worst as in August it will exceed €300.

The government decides on subsidies for electricity and natural gas bills of €1 billion for May and June, abolition of the readjustment clause and retroactive compensation from December 21 to household electricity bills.

A year later, the scene has changed drastically…..

The week begins with natural gas prices at €24.5, that is, the same as in September 2021, when Russia also began to set in motion its plan for the invasion of Ukraine, the first phase of which had to do with the gradual restriction of quantities of natural gas to Europe.

In 2023 alone, the price of gas has fallen by almost 300%, and according to some analysts cited by Bloomberg, prices may even turn negative in the summer.

A number of reasons contributed to this development:

-Europe recorded the second mildest winter on record and that meant it didn’t have to “burn” much of its reserves.

-High prices and economic distress contributed to the reduction of consumption by households. And with many countries flirting with recession, the industrial sector didn’t register greater needs during the year either. On average, consumption decreased in 2022 by 13% year-on-year.

-The opening of China’s economy was not as robust as expected which means that China and Europe did not enter into an auction with each other.

– Europe imported very large quantities of LNG. In fact, a historical record was recorded as they almost tripled compared to 2021.

– Ancient Epirus has accelerated the production of energy from RES. It is characteristic that in 2022 13GW of energy from solar panels were added, reaching 41.5GW.

In any case, the scene is set so that European countries are much more prepared to face whatever the coming winter throws their way. European warehouses are already 2/3 full when in previous years they were half empty, while some countries are doing even better:

Germany 74%

Italy 73%

Spain 94%

Austria 75%

Portugal 95%

At the same time, the “wallets” of the states become lighter, which do not have to give subsidies to households and businesses. If natural gas prices remained at current levels throughout the year, the state budget would save approximately €5.3 billion from its supply alone.

And of course, family budgets are getting lighter as lower energy prices mean lower bills and lower inflation.