Risk Center

Energy reserves increase as warmer winter approaches

Member states of the EU continue negotiations about possible region-wide mitigation measures to curtail winter impacts of the energy crisis. Most notably, the European Commission proposed a series of new emergency measures in mid-October to address the fuel supply crunch and the rise in energy costs on the continent.

Meanwhile, latest data shows that the European Union’s LNG imports via sea from Russia have increased by 50% in the first nine months of the year, underlining the difficulty the trading bloc has been encountering to effectively reduce its energy reliance on Russia since the outbreak of the war.

Production disruptions decrease in energy-intensive industries

As regional authorities implement a range of mitigation measures, the number of production-related disruptions tracked by Everstream Analytics has fallen for the first time since April, with less than a quarter of new stoppages or curtailments announced by late October compared to last September. Nevertheless, the long-term impacts of rising energy and material costs are still being felt across some energy-intensive industries in the region.

While no major halts were reported in Germany over the last two weeks, a recent survey indicates that out of over a thousand small and medium-sized companies’ businesses that participated in the survey, roughly a quarter plan to cut jobs to save costs. Last April, only around 14% had confirmed such plans.

Storage facilities near capacity as winter approaches

By late October, gas storage facilities have either already reached or are nearing maximum capacity in most countries.

Although many storage facilities are nearly full, and energy consumption fell across much of Europe over the summer, several countries remain at risk of electricity cuts. Electricity grids in Europe are expected to face the highest risks of disruptions in January and February 2023; however, electricity supply in France and Ireland may already face shortfalls before the end of the year. Parts of Southern Sweden and Southern Norway could reportedly also be at risk of energy shortages if the upcoming winter turns out to be particularly dry due to the countries’ reliance on hydro power generation.

Weather forecast predicts a warm start to winter

The end of October is usually the start of heating season across Europe, which will extend through the winter months and into spring, with heating demand increasing during November and reaching its peak in January, which is normally the coldest month of the year in Europe. The start of this heating season has been and will continue to be in the warm direction, with temperatures in the foreseeable future expected to be well above normal across virtually all of Europe.

This will lead to below-normal heating demand in much of Europe, likely help to ease the stress of the energy crisis during the early portion of the heating season, which will help build storage capacity in those countries that have not filled their heating elements prior to winter.

Everstream clients are receiving more detailed insights and recommendations about this risk.

Contact us to learn how we can give you a complete view of the risks affecting your end-to-end supply chain and what you can do to mitigate them.

Share this post

Up Next

October 26

Negotiations between the ILWU and the PMA remain deadlocked, while smaller disagreements threaten to snowball into bigger disruptions.

Get news