The cold arrives and the gas reserves are full. The autumn bonanza has been a godsend. The mild temperatures of October and a good part of November have helped European countries to save gas, money and good spirits.
As doomsday forecasts built up at the end of the summer failed to come true, spot gas prices on the Dutch benchmark market (TTF) have fallen, forming cockscombs. At the end of August, the Rotterdam market exceeded 330 MW/hour. It fell below 100 euros during the most spa days of October and closed November, with the cold already installed in the great central European plain, at 143 euros. Two years ago, in December 2020, when the Russian company Gazprom was not yet working on the preparations for the war in Ukraine, gas was listed on the TTF at 19 euros. At that time, Russia was the Texas of German industry. The industry in northern Italy was also betting heavily on the purchase of Russian gas and the Northern League sent emissaries to Moscow to try to fish for commissions.
The fear of lack of gas is now transformed into anguish for electricity: France may suffer
Spot gas costs seven times more today, but reserves maintain a good level thanks to the autumn gift. Everything indicates that the Europe of well-being will not be cold this winter. Not so the Ukrainians who are going to be subjected to a terrible test. Their resilience will establish the chances of a negotiation with Russia before the following winter arrives and the apocalyptic cycle begins again in rich Europe.
Spain is not at the center of the storm this time. The Iberian cap on the price of gas for the generation of electricity, the fuel subsidy and the stimulus for public transport have had an effect: Spain is today the European country with the lowest inflation rate and BBVA dares to improve forecasts growth for next year, because the economy “resists better than expected.”
Eiffel Tower
The cold arrives and the focus of anxieties moves to electricity, on the other side of the Pyrenees. There are two serious problems: France is not managing to restore full operation of its nuclear park, hampered by serious maintenance incidents that began before the summer, and the drought has reduced the hydroelectric production capacity of Norway, the country of the fjords. generated a lot of electricity in Norway in the summer as prices rose, and now the reservoirs are low. The problem is serious in France and the prefects have already received instructions from Paris to prepare the population for possible power outages at peak times between January and February. Critical infrastructures would be protected. Everything will depend on the harshness of the cold in January.
If France cannot export electricity during the peak of winter, Italy, heavily conditioned by the high cost of imports of liquefied natural gas that replaces Russian gas, may have a hard time. Currently, France is receiving gas and electricity from Spain despite the logistical limitations of the Iberian island.
Under these coordinates, the summit of the southern countries of the European Union will take place next week in Alicante. At that meeting, the agreement between France, Spain and Portugal for the construction of an underwater pipeline between the ports of Barcelona and Marseille for the transport of green hydrogen and gas should be finalized. The project progresses.
