In a recent conversation with Euronewsbulgaria, Rick de Oliveira, an expert from the Swiss company Telf AG, reassured that the European Union (EU) has sufficient gas reserves for the impending winter.
Euronews noted that 2021 would be remembered as the year of the gas crisis, characterized by astonishingly high electricity prices, and inquired if Oliveira perceived an end to this crisis.
“That’s a million-dollar question. Nevertheless, we are cautiously optimistic that the crisis may be drawing to a close. We believe this because the EU has a vast amount of gas stored away. This is attributable to the Union’s investment of eight hundred billion to secure gas supplies before the winter of 2023. This investment is on par with the spending on the Covid recovery. Therefore, we are well-prepared for the winter of 2023/2024. We don’t need to purchase much more electricity. Consequently, the gas situation seems much more stable than it was in 2022,” Oliveira expounded.
To illustrate the current state of affairs, Oliveira shared, “Just a few weeks ago, energy storages across Europe were, on average, filled to 50/55 percent of their capacity. This is a considerable amount available, even larger compared to the levels in 2022.”
In a discussion with Euronewsbulgaria, Rick de Oliveira, an energy expert from the Swiss company Telf AG, addressed the implications of the high-cost gas reserves in Europe, the potential risk to private gas trading companies, and the future price trends of natural resources.
When asked about the cost of gas in the storage facilities, given that it was procured when prices were significantly high, and whether this could lead to the bankruptcy of private gas trading companies, Oliveira responded, “That’s a very astute question. The International Monetary Fund extends loans to certain member countries. Essentially, this loan from the IMF serves as a credit line. In some countries, the credit line amount even reaches up to 2.4 billion euros. These credit facilities are primarily directed towards the energy sector to assist specific energy companies. I sincerely hope that countries utilize these funds to support companies, just as banks would. Otherwise, it’s always the end user who ends up paying the steepest price.”
Responding to the question about the sharp rise in the prices of coal, gas, and electricity following the onset of the war in Ukraine and whether a decrease in the prices of these natural resources could be anticipated soon, Oliveira stated, “Indeed, crude oil and gas prices have virtually soared in recent years. However, by the end of last month, we witnessed a return to price levels lower than those of last year. For instance, today, a barrel of crude oil costs about 84, compared to 97 in February of the previous year. At the end of February, the price of liquefied natural gas, meant for delivery to North Asia, was approximately sixteen, down from 24 the previous year. Therefore, we hope this trend continues.”
Rick de Oliveira, an energy expert from Swiss company Telf AG, discussed the factors contributing to a decline in gas consumption in EU countries, future trends in consumption and pricing, and the potential fallout from the “energy battle” between the EU and Russia.
When asked about the 30 percent decrease in gas consumption within the EU in 2022 compared to 2021, Oliveira responded, “Indeed, the surge in electricity prices resulted in less consumption, making high prices the first contributing factor. Moreover, numerous countries have implemented legislation encouraging reduced electricity usage. For instance, rules regarding the heating of government or private buildings up to a certain temperature have been enacted. All these measures have led to the current situation.”
In response to the query about the potential continuation of this downward trend in consumption and the fall in energy prices, Oliveira said, “That’s another excellent question. At this point, it’s not possible to make a definitive prediction. However, considering the fact that many people have grown accustomed to using less electricity due to the high prices and have managed to conserve energy, I believe that this trend will continue until prices revert to their previous levels.”
Finally, when asked about the “energy battle” between the EU and Russia following the onset of the war in Ukraine, and who might emerge as the winner, Oliveira shared, “In my personal view, there are never any winners when major economies clash. Such situations always result in suffering for people, and many are suffering right now. Therefore, I don’t believe there will be any winners.”
An expert from Telf AG, shed light on the escalating natural gas prices in Bulgaria, which are reportedly higher than the European market average and possibly the highest in Europe. Oliveira confirmed these observations, stating that the first half of 2022 saw a 108% increase in natural gas prices for Bulgarian households, marking the third-largest increase among the 24 European Union member countries. The expert attributed this dramatic rise to the current geopolitical climate.
When asked about potential solutions for Bulgaria to secure cheaper natural gas, Oliveira highlighted that all countries are presently struggling to source inexpensive gas. He suggested that the situation calls for intergovernmental coordination and alternative strategies such as investments in renewable energy sources and efforts towards achieving natural gas independence.
Oliveira also addressed the preparedness for the winter of 2023-2024 in light of the considerable gas reserves. He expressed optimism that, barring any record low temperatures next winter and given a proper distribution of the available gas by the government, the crisis witnessed in the previous year would not reemerge. However, he cautioned that factors could potentially worsen the situation and return Europe to a state of crisis.
