The European energy market faced a crisis due to the collapse of the energy partnership with Russia and the invasion of Ukraine.
Despite the challenges, Europe managed to lower its winter gas usage by 16%, exceeding the European Union’s most optimistic targets and avoiding the worst of the crisis.In the fall of last year, things were looking beyond grim for the European energy market. Coming on the heels of extreme energy market volatility caused by the enduring Covid-19 pandemic, Europe’s single-biggest energy trade partnership collapsed.
Europe managed to lower its winter gas usage by a whopping 16%, exceeding the European Union’s most optimistic targets and ultimately allowing the bloc to avoid the worst of the crisis. It has been widely reported – – that it was an unusually warm winter that saved Europe from a devastating energy crisis, and thereby simultaneously foreshortened the Russian war in Ukraine. But according to a new analysis from the Economist, that explanation is grossly oversimplified.
A statistical model built by the Economist found that “temperatures alone explain only around a third of the true reduction in gas demand this winter.” Even after taking the mild weather into account, “Europeans still reduced their gas use by around 12%.” Instead, the bulk of the reduction in consumption can be explained by rising costs, which reduced demand. Simple as that. Most European gas bills were facing bills about 60% higher compared to the previous year, so they cut back on consumption.
While the problem largely seems to have solved itself, the Economist warns that a long-term solution will still be necessary to avoid future energy crises. A bigger emphasis will have to be placed on energy efficiency – which played only a very small role in this winter’s European energy resilience – and other forms of clean and alternative energies to fall back on.
Translation: When people can’t afford something, they go without.
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