Spanish gas demand reduction continues

Gas consumption from Spain's households, industry and businesses has weakened in November from previous years, likely largely driven by cuts in industry.

Demand from the conventional sector — which includes residential, commercial and industrial customers — was just 569 GWh/d on 1-24 November, 223 GWh/d below the seven-year average for the period.

Mild weather partly explains the reduction. Overnight lows in Madrid averaged 7.5°C on 1-25 November, 2.7°C above the seven-year average.

But had the relationship between temperatures in the capital and conventional demand been in line with 2015-21, consumption would have been expected at 789 GWh/d over the period. This suggests that high gas prices are weighing extensively on Spanish consumption.

The bulk of the fall was likely in industry, where demand has collapsed from recent years. Industrial demand averaged 365 GWh/d in October — the latest available data — 193 GWh/d below the six-year average for the month.

Power-sector gas demand steps down

Strong wind output has limited the call on gas-fired power plants this month, contributing to unusually low November consumption.

Spanish consumption typically rises in November from October as heating demand steps up. Aggregate consumption increased to 1.1TWh/d in November from 928 GWh/d in October in the past seven years.

But demand of 910 GWh/d on 1-24 November was only narrowly up from 904 GWh/d in October (see graph).

Strong wind generation has muted the need for gas-fired generation, which has fallen in November from October, offsetting an increase in conventional demand.

Power-sector gas demand averaged 310 GWh/d on 1-24 November, down from 462 GWh/d in October. Wind generation is on track to be the highest for any month since February 2021.

Stronger December consumption

But colder weather could lead to an uptick in consumption next month.

Minimum temperatures in Madrid are forecast at 1.2°C on 25 November-31 December, down from 7.5°C this month, which could boost heating demand.

And power-sector gas demand could tick up, with monthly power capacity between Spain and France to rise to 2GW for December from 1.2GW for November and the past seven months. The French over-the-counter base-load December contract closed at a €304/MWh premium to the Spanish price on Thursday, suggesting a strong incentive for France to continue importing power from Spain.

Spanish power exports to France rose to 1.5GW on 1-24 November — above forecast capacity — from 1.2GW in October. But aggregate power exports have fallen on the month as exports to Morocco and Portugal ticked down.

By Auguste Breteau

Power-sector gas demand falls GWh