IEA head weary of too much energy security optimism in Europe ahead of 2023 winter

International Energy Agency (IEA) head Fatih Birol is weary of too much optimism about energy security in Europe ahead of the 2023 winter, he said in an interview with newspaper Handelsblatt. While gas storages are full, gas prices have dropped, and Germany built LNG import infrastructure in record time, Birol said it’s too early to sound the all-clear, explaining why gas could become scarce as the year progresses. According to the economist, there are three main reasons why Europe could still be driven into an energy crisis: no Russian gas, China's comeback as an importer and little supply growth, especially if the continent experiences “normal” winter temperatures. “Many governments are happy at the moment with the relatively mild crisis so far. But I fear they are a little too happy,” Birol told Handelsblatt. Replacing 60 billion cubic metres of natural gas from Russia, which were there to help fill storage facilities in 2021; a rebound of the Chinese economy, as the country is the world’s largest importer of oil and liquefied natural gas (LNG) competea for it with Europe; and historically low new sources of LNG in the end could all lead Europe into the energy crisis that it averted in 2022, Birol explained. To prevent this, the region should expand renewable energy more quickly, continue to save gas, and implement more energy efficiency measures.

Germany and Europe “are paying the price for decades of dependence on a single supplier,” Birol said, but he praised Germany on its “excellent job in switching energy supplies,” especially considering this involves huge infrastructure projects. Pressed on his opinion on Germany’s decision to extend the lives of its remaining nuclear power plants until April (past their original phase-out date at the end of 2022), Birol said he wished there were the possibility to extend the operating times much more if necessary. “The government decides,” he said, adding: “If it is technically possible and the population accepts it, it should be an option.”

German government members in early 2023 had signalled that while the energy crisis was not yet over, it had become “manageable” to a point where the government is confident it could be overcome for good by 2024. “For the 2023/2024 winter, we also have more than justified hopes that gas storages will be full at the beginning of winter,” economy and climate minister Robert Habeck said, arguing that the recent price decreases could be sustained.