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IEA's Birol Issues A Warning About A Tighter Energy Supply Next Winter

IEA's Birol Issues A Warning About A Tighter Energy Supply Next Winter
Fatih Birol, the head of the International Energy Agency (IEA), has warned that there may be energy shortages next winter because there aren't many new liquefied natural gas (LNG) products entering the market, even as China's consumption is expected to increase this year.
Birol told Reuters on the sidelines of the annual Munich Security Conference on Saturday that European governments had made many wise choices in the past year to ensure the supply of energy, including expanding the number of LNG terminals to displace pipeline shipments of Russian gas.
However, he added that they were also fortunate because a mild winter tamped down demand, and economic weakness in China caused the country's consumption to decline for the first time in 40 years.
"For this winter it is right to say that we are off the hook. If there are no last minute surprises, we should get through...maybe with some bruises here and there," said Birol. "But the question is...what happens next winter?"
A further 23 billion cubic meters (bcm) of LNG are anticipated this year, according to Birol, who also noted that China would likely consume 80% of the extra gas, even with a modest increase in economic output as pandemic restrictions loosen.
"Even though we have enough LNG import terminals, there may not be enough gas to import and therefore it will not be easy this coming winter for Europe," he said, noting this would likely push prices up again.
"It is not right to be relaxed, it is not right now to celebrate".
It would take years before new gas fields were operational, he said, even with renewed efforts to develop them.
Therefore, he said, households and businesses must continue their efforts to cut back on their use of gas while hastening the expansion of renewable energy production.
In an interview with Deutschlandfunk on Sunday, Klaus Mueller, the head of the German network agency that oversees the gas and electricity markets, also stated that he could not rule out the possibility of a gas shortage next winter, particularly given that Germany would now need to fill storage facilities without Russian pipeline gas.
"We can manage it but will have to really make a big effort," he said, adding that it would be good not to let storage levels drop too far below the current 71.52%.
The temporary extension of Germany's last nuclear plants until April, for example, was a step in the right direction, according to Birol, who also cautioned nations that had decided to phase out nuclear energy to reevaluate if this was the best time to do so.
"We need all energy sources to help us for the next winter," he said.

Christopher J. Mitchell

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