Linas Jegelevičius
The fretful and fearful predictions of freezing houses and apartments due to a shortage of gas this winter have just crashed and burnt.
Not only Mother Nature was benevolent and kind – this winter was very warm, but the swift and collective decisions of all the EU member states that allowed to keep the gas reservoirs full up to their brinks amid ongoing energy wars were essential, too, analysts say.
«Indeed, we passed the «gas exam» and, well, quite well. I’d put 8 on the scale of 10. To me, the success is mostly due to our liquefied natural gas terminal in Klaipėda. Having received a lot of beating all the way from the inception, it has been completely exonerated this winter. In my eyes, too. I have to admit I’ve criticized the project too, but it just appeared of outmost importance amid the war, truly our guarantor,» Vidmantas Jankauskas, former head of Lithuania’s Energy Pricing Commission and, now, international energy regulatory expert and independent consultant, told BNN.
«Due to the gas connections with Poland, Finland and Nordic countries, Lithuania, as well as the other two Baltic States, can finally heave a sigh of relief
– we are safe energetically, although the winter bared some problems, like the struggles of the gas-fired nitrogen fertiliser producer «Achema», the Baltics’ single largest guzzler of gas,» the analyst emphasised.
Amid rising natural gas prices, «Achema» kept going offline and back online since the inception of the energy market tumults.
Other Lithuanian energy experts and analysts also taut the European Union and Lithuania for prompt and swift decisions to avert possible gas disruptions ahead of this winter.
«The filling of gas storage facilities was executed swiftly and the level of their filling up will remain at a very high level throughout 2023. This allows us to hope that by filling the storage facilities for the next season, we will avoid both a jump in gas prices and a lack of gas supply,» Lithuanian Energy Minister Dainius Kreivys, who participated in the recent meeting of the International Energy Agency (IEA), told Lithuanian media.
He also praised the LNG terminal in Klaipėda.
«With the LNG terminal, Lithuania has secured the required amount of gas. The state-appointed supplier (Ignitis) ensures the required quantity of the LNG terminal, and this provides us with additional security. It is also important to mention that a cogeneration power plant will start operating in Vilnius later this year, which will directly reduce the demand for heating gas,» Kreivys said.
According to him, the risks are still visible, but they are assessed and their control measures are being worked out.
«This is the thought that was accentuated in the last IEA meeting. Last year, the European and global gas market experienced a shock and went into crisis. Despite this, the EU was able to fill its gas storage well above the historical averages,» the minister said.
He pointed out that after a relatively warm winter, the storage facilities are still two-thirds full.
«According to the data of the 20th of February, 63.7 percent of them were filled, more than 700 terawatt hours were available for the rate. For comparison, at the same time last year, there were 347 terawatts of natural gas left in European storage, and in 2021 – 433 terawatts.
If spring weather is close to the long-term average, it is likely that storage capacity levels in Europe will remain above 55 percent. This is much more than the standard 35 percent, which usually remained after the end of the winter season,»
the minister said.
As another aspect, he mentioned China’s economy, which is still on the road to recovery. Thence, it is consuming less gas than last year.
Gas storage facilities in Asian countries are also full, consumption is sluggish, so it is likely that after the repair of the Freeport terminal in the USA and its return online, the amount of gas supply in the markets will only increase, the Lithuanian Energy minister noted.
«Judging by the overall picture now, natural gas prices will very continue decreasing,» V. Jankauskas predicted to BNN.
With March counting its first days already, local heat providers are also heaving a sigh of relief.
«Indeed, there were a good deal of worries before the heating season, but, luckily, they did not flesh out. Thanks to warm winter mostly – in Lithuania and in entire Europe. The full gas stocks were also key. Their generous availability of gas pushed gas prices down – from nearly 120 euros per 1 megawatt hour in December to approximately 60 euros per the unit in late February. Thence, the stark difference in gas bills for local residents,» Giedrė Juršėnė head of the heating company in Palanga, a Lithuanian Baltic resort, told BNN.
According to the Lithuanian Energy Agency, natural gas prices decreased 2.6 percent during period from 17th to 23rd February.
Marius Dubnikovas, Vice President of the Lithuanian Business Confederation, says that when looking at the dynamics of relations between Europe and Russia in the field of energy, it would be worth looking at the graph of gas prices lasting more than a year and it will be clear when «Russia loses at least the energy war.»
«The European Union was like a giant, woken up from a deep sleep, realising that there was a danger…Conventional (war) remains, there was kind of a mess in energy sector in the beginning, around September 2021, when the prices of gas started going up drastically before falling down to the current level. It should be clearly understood that Russia tried to put the whole of Europe «on the needle» even before that and the effort will remain,» Dubnikovas told delfi.lt
Meanwhile, Chief Economist of Luminor Bank, Žygimantas Mauricas, praises the agility of the European energy market and unity the most, yet expresses caveats.
«We have won the first battle, but we have not won the war yet, so we should continue with what has been done and what remains to be done. The greatest achievement is that we preserved the unity of the states and the common market of the European Union, both in electricity and gas sectors. There were some disturbances, like, for example, Spain and Portugal, which received an exception for the price of gas in electricity production, but basically we managed to preserve unity and did not divide,» the economist said.
According to him, the bloc and individual member states should continue heavily investing in renewable energy and grid infrastructure, pass energy-efficiency measures and speed up decarbonisation of home heating and industry processes.
Especially that the International Energy Agency (IEA) cautions that, although gas prices have fallen and the gas storages are nearly full, the real test could be next winter.