EU reassures over winter energy supplies, but cold weather is risk to watch

European gas and power prices have surged this year as demand has shot up all over the world for energy amid economic recovery from the coronavirus pandemic.

European energy supply is not at immediate risk despite low gas storage levels ahead of the winter, but the European Commission is working with other gas-producing countries to increase supply. 

European gas and power prices have surged this year as demand has shot up all over the world for energy amid economic recovery from the coronavirus pandemic.

The EU has had to compete with Asia for liquefied natural gas where demand is also high, amid low storage levels, infrastructure outages and lower than usual supply from Russia.

The Commission outlined measures the EU could use to combat surging energy prices, and said it would explore the possible benefits of joint gas purchasing among countries as a way to cushion price spikes.

"While energy price fluctuations have occurred in the past, the current situation is exceptional as European households and companies face the prospect of higher energy bills at a time when many have been hit by loss of income due to the pandemic," it said in a communication on energy prices.

The current level of gas storage in Europe is less than usual, at slightly above 75% full compared with a 90% average at this time in the last 10 years, it said. 

This would be adequate in a winter similar to the previous one but the weather will be a variable to watch, it added. The Commission said it is working with the European Network of Transmission System Operators for Gas (Entsog) to monitor security of supply. 

The latest Entsog winter supply outlook found that Europe's gas infrastructure of storages and distribution systems offers sufficient flexibility to deal with high demand during an extremely cold winter. 

Reuters