BAKU, Azerbaijan, Dec.20. The industrial sector has been the main source of gas demand flexibility so far in 2022, and it is expected to continue playing that role to help balance gas supply and demand in Europe, Trend reports with reference to Oxford Institute of Energy Studies (OIES).
“This might be achieved through voluntary reduction and demand response, but cold weather could exacerbate the need for energy rationing in order to divert supply to protected users. This, in turn, would cause widespread disruption to manufacturing production, though exactly which industries would be targeted first remains largely unclear. Warm weather at the beginning of the year and similarly, at the beginning of the winter season 2022/23, limited the need for gas use in space heating this year. In addition, mild temperatures and continued high gas prices seem to have facilitated an important demand response from small consumers, a usually rather inelastic sector in the short term, in the form of lower production and fuel switching in small businesses and lower energy use in the buildings sector,” reads the latest OIES report.
The report reveals that participation of consumers in demand saving measures in buildings is going to be essential this winter to limit a sudden surge in gas demand during the coldest days.
“But there are two main uncertainties: first, there have been concerns that government intervention in subsidizing energy bills and inappropriate (and/or late) campaigns to save energy could send mixed signals and help keep consumption high; and second, that consumers’ willingness to reduce their energy for heating may erode when cold temperatures finally hit Europe,” say OIES analysts.
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