European gas demand dropped by over 100 bcm in just two years, falling to its lowest level since 1995. the 2022/2023 gas supply shock necessitated a painful but necessary readjustment in demand in order to balance back both the European and global gas markets.
Following a 13% (or 70 bcm) drop in 2022, European gas consumption fell by another 7% (or 35 bcm) in 2023. All sectors contributed to these declines, although the drivers have markedly shifted from one year to the other.
In contrast with 2022, the demand reduction in 2023 was largely driven by the power sector, as the rapid expansion of renewables, together with improving nuclear availability reduced the call on gas-fired power plants.
In addition, mild winter weather together with gas-saving efforts continued to weigh on gas use in the residential and commercial sectors.
Industry, which suffered the steepest decline in 2022, moved towards a gradual recovery in the second half of 2023, as lower price levels incentivised higher operating rates, including in the more gas-intensive industrial sectors.
Source: Greg Molnar
