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Western Europe's power sector gas burn falls

9 Oct 2017, 1.46 pm GMT

Western Europe's power sector gas burn falls

London, 3 October (Argus) — Western Europe's power sector natural gas demand was lower than a year earlier last month for the first time in two years.

Combined power sector gas burn in Germany, Italy, France, Spain, the Netherlands and the UK was just below 2 TWh/d in September, down from around 2.25 TWh/d a year earlier. Germany, Italy and France led the decline, while Spanish power sector gas demand rose.

Higher French nuclear generation, combined with an increase in German wind and solar power output, reduced gas burn.

Power sector gas demand was particularly strong in September last year, because of low French nuclear production and the displacement of coal. Almost full Dutch and German storage weighed on Dutch TTF prices late last summer to levels that encouraged gas to displace coal and offset weak injection demand.

Gas stocks were much lower towards the end of summer 2017, lifting TTF prompt prices to levels that were less competitive with coal. And UK thermal generation has been in long-term decline, resulting in gas-fired output falling, as there is little coal left to displace from the generation mix.

Cooler weather in Italy reduced electricity demand last month, with daytime temperatures in Milan slipping to 23.2°C from 27.9°C a year earlier. Italy had led the increase in European power sector gas burn this year, driven by warm summer weather and low hydropower output.

But hot and dry conditions boosted gas demand in Spain, where reservoir levels have slipped even further. Gas has been competitive with coal in Spain this summer, contributing to the increased consumption.


French nuclear generation GW

Power sector gas burn GWh/d

Wester Europe's power sector gas demand TWh/d

German wind and solar generation GWh/d

UK gas and coal-fired power output GW

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