Coal abandonment in power generation promoted gas demand growth in Europe — top manager
Accelerated abandonment of coal in power generation and the overall recovery of economic activity facilitated gas demand growth in Europe and led to the price rally, CEO of Gazprom Export Elena Burmistrova said on Thursday.
“Gas demand growth was promoted not merely by the overall recovery of the economic situation and power consumption but also to accelerated abandonment of coal in power generation, supported by emission quotas becoming more expensive, and by decline in generation at wind and hydropower facilities,” she said.
The shortage caused by redirection of LNG supplies to Asian markets at higher prices also contributed to the gas price spike in Europe, Burmistrova said. “Significant volumes of LNG departed to more attractive Asian markets, where gas lately has been much more expensive than in Europe owing to the ‘Asian premium.’ The thesis that Russian pipeline gas merely increases dependence on a single supplier, unlike more flexible LNG, was promoted in Europe for many years in succession. However, market realities evidence at present that the ‘flexible’ gas voted for the dollar and left to premium markets, actually leaving Europe alone to face its current problems,” the top manager added.