Market Trends of Europe Gas Industry
This section covers the major market trends shaping the Europe Gas Market according to our research experts:
Utility Sector (i.e., Power Generation) Sector Expected to Dominate the Market
- Power generation uses a variety of sources ranging from fossil fuels, such as natural gas, coal, and oil, to renewable sources, such as wind and solar. As of 2021, Europe generated around 23.7 % of its electricity from natural gas.
- The power generation mix is heavily skewed toward natural gas because of cheaper domestic fuel availability and vast reserves. Due to constraints in adding other conventional generation sources, viz., hydro, solar, and oil, its share in the mix has increased over the years.
- In 2021, electricity generated from oil, natural gas, and coal produced around 259.4 billion kWh of the total electricity generated, accounting for over 45% of the total electricity production across Germany. The growing number of natural gas-fired power plants in Germany will, in turn, showcase the utilization of natural gas within the country.
- Also, as of 2021, among the European countries, Belarus generated the most electricity from natural gas, accounting for 95.7%, followed by Malta, Italy, and the Netherlands. This shows that power generation through natural gas is predominant in Europe.
- In December 2021, Ansaldo Energia began construction works for a project that aimed at improving the efficiency of the EP Produzione combined-cycle gas turbine (CCGT) in Tavazzano and Montanaso in Italy's Lodi province. The new 800 MW CCGT unit is scheduled to get commissioned by November 2023.
- Owing to the above points, the utility sector is expected to dominate the European gas market during the forecast period.
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Norway Expected to Dominate the Market
- Norway has rich natural gas reserves. As of 2021, with 114.3 billion cubic meters, the country was its topmost producer. It has displaced Russia as the top supplier of NatGas to the EU as energy supply chains are rejiggered.
- By the end of the year 2022, natural gas demand across the country was expected to recover to its pre-crisis levels and increase slightly during the forecast period. It must be mentioned that in 2021, the country's natural gas consumption was around 4.3 billion cubic meters (bcm).
- To meet the demand and offset the production decline from maturing assets, investments in new gas fields are being undertaken by the operators in the North Sea. With more than 20 development wells associated with these projects, new project sanctions will directly impact increased drilling activity over the next three years.
- In November 2021, under the development plan, Norway's state-controlled Equinor was expected to turn the Oseberg field on the Norwegian Continental Shelf from primarily being an oil asset into a gas producer.
- Moreover, in July 2022, Eesti Gaas AS, an energy company in Estonia, signed an agreement to buy two terawatt-hours (TWh) of liquefied natural gas from Equinor. The deal cost is around USD 315.53 million.
- Owing to the above points, Norway is expected to dominate the European gas market during the forecast period.
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