Executive Director of International Energy Agency (IEA) Fatih Birol has warned of possible energy shortages next winter as relatively little new liquefied natural gas (LNG) is coming to the market while China's consumption is set to rise this year.
Birol told Reuters on the sidelines of the annual Munich Security Conference on Saturday that European governments made many correct decisions over the last year to ensure energy supply, such as building more LNG terminals to replace pipeline deliveries of Russian gas, adding that they also got lucky with a mild winter dampening demand while economic weakness in China led to the first drop in consumption there for 40 years.
"For this winter it is right to say that we are off the hook, and if there are no last-minute surprises, we should get through, maybe with some bruises here and there," Birol noted, while raising the question: "what happens next winter"
Birol said an additional 23 billion cubic metres (bcm) of LNG is expected this year, adding that even with an only small increase in economic output as pandemic restrictions ease, China would likely swallow 80 percent of the extra gas.
"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, pointing out that this would likely push prices up again.
Even with a renewed push to develop new gas fields, it would be years before they came online, he said, explaining that households and firms need to continue efforts to reduce gas usage while renewable energy output needs to expand faster.
Birol also warned countries that had decided to phase out nuclear energy to reconsider if this was the best time to do so, saying that the temporary extension of Germany's last nuclear plants until April was a step in the right direction.
