Bruegel - Europe Gas Outlook 2023

Bruegel's Europe Gas Outlook 2023 report focuses on the energy crisis that the European Union faced in 2022, particularly in the wake of Russia's invasion of Ukraine and the resulting reduction in Russian gas exports. The EU was able to weather the crisis through swift decision-making, fuel switching, and rapid adjustments facilitated by a strong market framework, which included the rapid ramping up of liquified natural gas (LNG) imports and reductions in domestic demand. The report provides an updated analysis of the EU's situation, with a focus on what must be done to ensure filling of gas storage facilities ahead of the 2023-24 winter. It explores different scenarios taking into account the volumes of gas the EU receives from Russia, the weather, and the situation in power markets. The report also explores the two pillars of energy security, LNG supply and natural-gas demand reductions. The EU has agreed to reduce natural gas demand by 15 percent between August 2022 and March 2023 and the report evaluates how this was achieved, with a focus on possible economic consequences. The report concludes that the EU should extend its demand reduction target to at least October 2023. It also highlights the importance of taking decisions with winter 2023-24 in mind, as an EU gas-storage regulation requires volumes to reach 90 percent of capacity by October 2023.