Home Business News Europe warned ‘electricity blackouts are likely’ within months should the average temperatures fall

Europe warned ‘electricity blackouts are likely’ within months should the average temperatures fall

by LLB staff reporter
24th Jan 22 3:29 pm

Analysts at investment bank Goldman Sachs have warned that Europe could be struck with “electricity blackouts” within months should the average temperatures fall.

Europe has more than enough gas stored to get through the winter months, however should the seasonal temperatures fall this would lead to more gas being used which could see storage fall beyond the record lows in 2018.

The bank’s analysts warned, that should this happen then “electricity blackouts (are) likely.”

Goldman said, “The impact of natural gas prices on the economy is broader than most people realise.

“This is not only because it is the most important commodity for winter heating or because large industrial sectors, such as chemicals, glass metals smelting and cement rely heavily on gas for manufacturing.

“But, importantly, natural gas is often the marginal fuel for power generation, which means it is one of the key drivers of electricity prices, significantly impacting the broader economy.”

The threat of an imminent invasion of the Ukraine could also see gas prices soar, another expert has warned the British government.

One senior official quoted by The Times said, “Unlike some countries the UK hardly imports any Russian gas.

“But like all countries we are exposed to rising wholesale prices, which would be a significant issue if Russia further restricted supply.”

The UK receives most of the gas supply from the North Sea and Norway, although Europe relies on 35% of their gas from Russia.

The lack of gas available to Europe depends on Russia and if they were to raise their prices to their neighbours.

Germany receives 40% of their gas from Russia, whilst Sweden and Finland import higher quantities, with Norway being the second largest supplier to Europe.

The Department for Business, Energy and Industrial Strategy told Metro.co.uk, “Unlike other countries in Europe, the UK is in no way dependent on Russian gas supply.

“We meet around half of our supply from within British territorial waters and the vast majority of imports come from reliable suppliers such as Norway.

“Less than 3% of our gas was sourced from Russia in 2020.

“The Energy Price Cap has been insulating millions of consumers from high global gas prices throughout the winter months.

“We’ll continue to listen to consumers and businesses on how to manage the costs of energy.”

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