EU gas demand faces long-term constraints
Thursday, January 28, 2016
Subject
EU gas demand.
Significance
In 2015, EU natural gas demand rose for the first time in five years. However, the COP21 Paris climate change agreement is likely to add momentum to structural shifts in power generation, which are limiting demand growth. This may raise doubts over the efficacy of new gas pipeline projects.
Impacts
- The EU's gas import gap is expected to rise.
- However, the apparent peaking of overall demand will diminish importers' willingness to commit to major pipeline projects.
- Projects potentially affected could include Nord Stream 2 or the Trans-Anatolian pipeline.
- Gas's difficulties provide a potential opening for other technologies that offer dispatch flexibility.