What Outlook for European Gas Demand? An Overview of Possible Scenarios

Abstract

Gas demand expectations in Europe have been revised down since the early 2000s. The power sector is no longer synonym of certain additional gas demand and in a majority of countries, it will not be. Natural gas consumption in the region fell from 567 bcm in 2010 to just over 471 bcm in 2015. Nonetheless, even in a context of slow economic growth and decarbonisation of the energy sector, there is potential for natural gas in the energy mix, especially in the 2020s when lots of firm (coal and nuclear) capacity close down. Even in base case scenario with limited optimistic assumptions, gas demand could rise to 512 bcm in 2030, but actions must be taken soon to ensure at least a minimum role for gas in the future. If gas plants have been retired and no new ones have been built by then, it is likely that new and efficient coal plants (and eventually nuclear plants) will run for longer. This will limit the need for gas in the generation mix and also provide an even stronger case for additional renewable investments to decarbonise the power sector.