There's a run on camp stoves on Spain's Balearic Islands, while a key energy analyst says there could be gas shortages.
It's all proof that Europe's energy emergency isn't over.
Energy prices soared to the top of the political agenda last month — even being discussed by EU leaders. The reason was an unexpected surge in natural gas prices coupled with sluggish renewable energy production. That saw gas and power prices spike in many countries — causing squeals of outrage from consumers and immediate concern from politicians.
October's price worries subsided when Russia promised to start replenishing its storage systems in Austria and Germany this month.
But now the disquiet is back — and politicians across the Continent are helping fuel a freakout.
Austrian Defense Minister Klaudia Tanner was the first national figure to warn consumers last month that low energy supplies might make the lights go out this winter. Tanner launched a nationwide poster campaign instructing Austrians to prepare for power cuts by keeping 15 days' worth of food on hand.
“The question is not whether a blackout will come, but rather when,” she told the press.
Spain was next, after Algeria shut off one of its two pipelines feeding natural gas to the Iberian Peninsula at the end of October. Algiers says it will fulfill its contracts, and the Spanish government is projecting an aura of calm about gas supplies. Ecological Transition Minister Teresa Ribera insists the country has enough gas reserves to cover at least 40 days’ worth of demand, far more than it should need.
But Madrid's conservative regional president, Isabel Díaz Ayuso, is raising the possibility of blackouts this winter.
"The fear of shortages is real among the people," said Ayuso, a rising star on the Spanish right.
Meanwhile, Catalonia's deputy director for civil protection, Sergio Delgado, recently warned that a power outage was "a real possibility." Although he stressed that authorities were "calm" and fully prepared for any blackouts, he also urged Spaniards to keep an emergency kit with flashlights, a whistle, warm clothes and canned food ready.
Ayuso's statements, and the ensuing media speculation over blackouts, triggered panic buying in Spain, with hardware stores reporting a run on camping stoves, flashlights and canned food. The stockpiling of survivalist supplies has been especially noticeable on the Balearic island of Mallorca, which is home to a large German-speaking population that has been exposed to talk of blackouts coming from both Vienna and Madrid.
In reaction to the frenzied shoppers, Pedro Fresco, the Valencian government's director for the ecological transition, warned people about getting "carried away by conspiracy theories that prey on people's ignorance" and criticized the media for fueling the panic.
Fresco pointed out that the maximum amount of power needed during superstorm Filomena, the snowstorm that buried Spain under mountains of snow last January, was 40,000 megawatts.
"We have 113,000 MW of generation capacity," he tweeted. "Let's not turn this into the run on markets to buy toilet paper: it is highly unlikely that a generalized and lasting blackout can occur in Spain."
But for every authority figure that urges calm, there's another predicting impending doom. This week, Jeremy Weir, CEO of commodity trader Trafigura, warned that current supplies of natural gas aren't enough to power Europe through cold snaps this winter, saying people should prepare for lasting power outages.
“We haven’t got enough gas at the moment, quite frankly. We’re not storing for the winter period,” Weir said at the Financial Times Commodities Asia Summit. “So hence there is a real concern that ... if we have a cold winter, that we could have rolling blackouts in Europe.”
Supply stresses
There is some reason for worry.In addition to the shutdown of the Algerian pipeline, there is concern that the U.S. will keep more natural gas for itself rather than export it, adding to pressure on global liquefied natural gas markets.
There's also a lack of certainty about energy supplies from Russia — especially as the U.S. and others warn that the Kremlin may be girding for an expanded war with Ukraine. Last week, Alexander Lukashenko, the authoritarian leader of Belarus, threatened to turn off gas flowing from Russia to Poland on the Yamal pipeline in response to the possibility of expanded EU sanctions against his regime due to the growing migrant crisis on the Polish-Belarusian border.
On Tuesday, the German energy regulator's decision to suspend the Nord Stream 2 pipeline's certification procedure dashed natural gas traders' hopes that the Russia-to-Germany conduit would get its approval in time to help ease a winter supply crunch. Spot natural gas prices exceeded €100 per megawatt-hour on the benchmark Dutch TTF hub on Wednesday — worryingly close to the October record peak of €116 per MWh. On Friday, a December contract traded slightly lower, at €86 per MWh.
It's not all bad news.
Russia has promised to top up Austrian and German storage. Gas flows through the TAP pipeline from Azerbaijan to Italy and Greece have risen, and Norway has boosted exports to Europe to capitalize on high prices.
But even then, James Huckstepp, natural gas analyst at S&P Global Platts, predicted that West European gas storage won’t return to historic levels until November 2022, and will end this winter season drawn down to 15 percent. The low levels could be a problem for the bloc in the event of a prolonged cold snap, EU gas network operator group ENTSO-G warned last month.
Despite that, ENTSO-E, which represents the bloc's electricity network operators, is urging calm.
"Blackouts are extreme and very rare events in Europe," said the group's spokesperson, adding that the last major grid outage in Europe happened nearly two decades ago. Since then, the Continent's grids are better connected, allowing electricity and gas to flow easily between countries.
Europe’s energy freakout
While politicians warn of blackouts, the power grid operator says power outages are ‘very rare.’
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Crazy times are going on in Europe, folks, take care of yourselves.
