Impact of Russia-Ukraine war on European gas markets: can Europe cope without Russian gas?

This policy note is a follow-up to our previous analysis sent to subscribers, examining the impact of the Russian-Ukraine war on European gas markets. It focuses on an in-depth, short-term scenario investigating a potential halt to Russian gas flowing to Europe in winter 2022-23. We’ve made it available here for our public audience.

Key findings include:

  • Assessment of a more extreme ‘no Russian gas’ scenario – including analysis of demand/supply balance for Winter 2022/23, possible measures to diversify supply and reduce gas demand, and associated costs and risks
  • In the extreme case that Russian gas imports cease, this would leave a large gap in supply to be met by other sources or demand reductions. Most of these measures present significant economic, societal and technical challenges, but would be sufficient to offset the halt to Russian imports
  • Alternative supplies could be increased through a combination of higher LNG imports, and increased production. Storage would play a key role in meeting winter demand, but filling storage to the needed levels could cost in the order of EUR 60-100 billion and likely require Government intervention
  • Reductions in gas consumption could also bridge the gap, through a combination of: gas to coal fuel switching; keeping nuclear and coal power stations online; demand reduction or fuel switching in industry; and efficiency savings or behaviour change in households

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