The head of the IEA sees an energy shortage in Europe next winter

BERLIN — Europe will be able to cope with natural gas supply difficulties in the coming months thanks to significant reserves, although the continent may face a bigger energy crisis next winter, the head of the International Energy Agency said on Thursday.

Fatih Birol said that, barring unforeseen events, “Europe will go through this winter with economic and social headaches, bruises here and there” due to efforts to wean off Russian gas and higher energy costs due to the war. in Ukraine.

“Next winter will be harder than this one,” he said.

Birol cited that Russian gas shipments to Europe could end completely next year, while China’s demand for liquefied natural gas appears to be picking up as its economy recovers from the pandemic.

Meanwhile, the IEA predicts that new gas capacity available in 2023 will be the lowest in two decades, he said.

“This is why Europe needs to prepare for next year today,” Birol said, adding that solidarity between European nations is key.

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At the energy symposium in Berlin organized by the German government, the head of the IEA stated that Russia can expect costly consequences if it quarrels with European energy buyers over Ukraine.

Since before the war 75% of Russia’s gas exports and 55% of its oil went to Europe, Moscow must find new markets for its production, he said.

Birol called the assumption that Russia is simply shipping to Asia “absolutely incorrect,” noting that it would take a decade to build pipelines through Siberia and that oil tankers take 10 times longer to reach customers in the East than in Europe.

In addition, the departure of specialist oil and gas technology companies from Russia due to sanctions means that production from challenging production sites is likely to decline.

“Russia will most likely lose the energy battle,” Birol said, adding that the IEA estimates Moscow will lose about $1 trillion in revenue by 2030 because of the war in Ukraine.

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While noting that the energy crisis is also having a severe impact on developing countries, Birol said it will help accelerate the transition to fossil fuel alternatives.

“When I look at energy security, climate commitments and industrial policy drivers, I am optimistic that the current energy crisis will be a turning point in the history of energy policymaking,” he said.

Despite this, clean energy investments will be five times higher than today, Birol said.