​The energy crisis, caused by Russia’s manipulation of gas supplies and invasion of Ukraine, in a short time led to serious changes in the energy markets of Europe. Above all, the desire to get rid of Russian dependence as quickly as possible has led to a record growth of renewable sources, which aims to replace gas and coal, as well as a significant reduction in consumption, according to the Agency’s latest reports. for cooperation of energy regulatory authorities (ACER).

Note: Reports analyze electricity and gas markets in Europe in 2023, trends to 2024 and future challenges

We consume less and less energy and gas / Prices have fallen

At the European level, demand for electricity in 2023 fell by an average of 3.4% compared to the previous year.

Gas consumption dropped a lot, on average by 8%. This sharp drop in gas is attributed to the stagnation of industry, the growth of renewable energy sources and a mild winter.

In Romania, according to statistics, the decrease was 5.2% of electricity. Consumption in the economy decreased by 4.1%. Regarding natural gas, in contrast to trends in other countries, Romania has not seen a significant reduction in consumption, approaching the 2022 level.

As demand decreases and sources diversify, so do prices. On the representative TTF exchange for Europe in Amsterdam, the average price in the first months of 2024 reached EUR 27/MWh. Last year, the average price was €41/MWh, well below record levels in 2022, when it topped €300/MWh at the height of the energy crisis.

The decline in gas prices was also caused by record volumes of gas in storage. At the beginning of winter, the warehouses were filled to 99.9%, and by the end of it they reached 59%.

For electricity, the average day-ahead price in 2023 was €93/MWh, less than half of the average price of €219/MWh in 2022. In the first months of 2024, the decline continued, reaching around 70 EUR/MWh.

On the price side, the levels of 2020, when they were very low, have not yet been reached, especially against the background of the sharp decline of the industry affected by the pandemic.

We replace pipeline gas with liquefied gas

Imports of Russian gas are being massively replaced by liquefied gases. We remind you that in recent years the USA has become the main supplier of liquefied gas to Europe, accounting for 28% of imports in 2021, 43% in 2022 and 46% in 2023. The US is planning new terminals and increasing export capacity. Including only those LNG terminals already under construction, by 2030 US export potential will reach about 238 billion cubic meters. This indicator exceeds the estimated European demand for liquefied gas in 2030 by 76%.

ACER data show that last year the volume of liquefied gas imports increased by 50 billion cubic meters. New investments in LNG infrastructure and sharp reductions in consumption have brought supply and demand into balance in EU gas markets.

As of February 2024, 19 liquefaction projects were under construction worldwide, which would increase LNG production by about 200 million tons by 2030, despite a US freeze on new export licenses. This increase in production capacity represents approximately half of the current volume of liquefied natural gas sold worldwide.

Record production of renewable energy

ACER reports record levels of electricity from renewable sources replacing fossil fuels. As the use of coal and gas-fired power plants declines, renewable energy sources have risen to a record 45% of total electricity generation, especially solar and wind.

More precisely, at the European level, in 2023, solar and wind energy production increased by 84 TWh, which is equivalent to 120 Cernavode nuclear power plants.

Photovoltaic power generation increased by 18%, and wind power overtook gas and coal power.

With the energy crisis and Russia’s invasion of Ukraine, the EU accelerated the transition to green energy.

Installed renewable capacity increased dramatically from 2022 to 2023.

Solar capacity increased by 20%, nearly double what it was in 2019, and wind capacity increased by 8%. Photovoltaic power has an advantage as it benefits from support measures, while the wind sector remains affected by complex authorization procedures.