While record-high gas reserves provide a safety net for Europe this winter, a harsh reality lurks beneath the surface: consumers are still grappling with historically high energy bills despite the abundance. The continent entered the cold season with gas storage at an unprecedented 97.5% capacity, a far cry from anxieties earlier in the year. However, the victory dance over full tanks is tempered by the sting of empty wallets.
The EU has record-high gas stocks at the end of November 2023, according to research provided by Moody’s this month. This indicates that there is very little chance of energy shortages this winter and that the EU is well-positioned for the upcoming cold season.
“Europe’s improved energy reserves going into this winter are the result of the effectiveness of government actions on the supply and demand side, and consistent energy savings by both households and companies,” the Moody’s report stated.
Gas Infrastructure Europe (GIE) data shows that as of September 30, gas inventories in the UK and the EU totaled 1,096 terawatt-hours (TWh).
No matter the weather during the winter of 2023–2024, the high level of starting stockpiles, new LNG import terminals, and some excess gas stored in Ukraine should guarantee that inventories remain comfortable.
Energy, which was a major factor in the increases in consumer prices that followed Russia’s invasion of Ukraine, has been one of the main forces controlling inflation in recent months. November saw annual headline inflation in the euro zone of 2.4%, with energy displaying 11.5% year-over-year disinflation, even as the pace of price increases in all other sectors merely eased.
According to data from the Office for National Statistics, the inflation of gas prices in the United Kingdom fell by 31% in the year ending in November.
For many Europeans, the winter comes with an unwelcome gift: sticker shock. Moody’s research warns that gas tariffs for both businesses and households are likely to stay above their pre-pandemic averages until at least 2031. This ongoing squeeze threatens living standards and economic activity.
Before the end of winter 2023–2024, stocks are expected to drop to about 575 TWh, leaving storage sites 50% full, based on the current storage level and historical depletions over the previous ten years.
There is still a great deal of uncertainty regarding typical temperatures and the amount of depletion that will occur at this early stage of the winter heating season.