Electricity use drops in Europe: What you need to know about the global energy crisis this week

A decision by the OPEC+ oil producer group to cut output could push the global economy into recession, the International Energy Agency has said in its monthly report. “With unrelenting inflationary pressures and interest rate hikes taking their toll, higher oil prices may prove the tipping point for a global economy already on the brink of recession,” the report said.

Russian President Vladimir Putin says Turkey could be the best route for redirecting gas supplies to the European Union after the Nord Stream leaks. Putin told Turkish President Tayyip Erdogan at a meeting in Kazakhstan that increased cooperation on supplies with Turkey could also help to regulate prices.

The head of Russia’s state-controlled gas corporation, Gazprom, says a large section of the damaged Nord Stream pipelines might need to be replaced, Russian media has reported. CEO Alexei Miller said a significant section of the pipeline on the Russian side is now filled with water.

Around half of US households that use gas to heat their homes can expect to pay up to 28% more this winter than last year due to surging fuel costs, according to projections from the US Energy Information Administration. The average cost to heat a home with gas during winter is expected to rise from $724 to $931. Around 40% of American households heat their homes using electricity, which is expected to cost them around $1,359 this winter, a 10% rise on last year.

Israel and Lebanon have agreed a deal to end a long-running maritime border dispute, according to Al Jazeera. The agreement centres on an area of the eastern Mediterranean where Lebanon wants to explore for natural gas and Israel has already reportedly discovered supplies of hydrocarbons.

Indonesia may need around $37 billion of financing to shut down its coal-fired power plants, according to Bloomberg. That would mean Southeast Asia’s largest economy could wean itself off the fossil fuel by 2040, the news organization said, citing a report. It also says that would be a decade earlier than the official target.

Plans are under way to develop what’s been described as the first ‘green hydrogen corridor’ between southern and northern Europe, according to CNBC. Madrid-based energy firm Cepsa says the supply chain would run from Algeciras in southern Spain to Rotterdam in the Netherlands. European Commission President, Ursula von der Leyen, said last month that “hydrogen can be a game-changer for Europe. We need to move our hydrogen economy from niche to scale”.

European electricity use is falling to levels seen during the worst of the COVID-19 pandemic. However, some countries need to curb consumption further to prepare for a possible energy supply crunch this winter, a Reuters analysis of power data shows.

Many European countries are trying to save energy following a collapse in Russian gas exports due to sanctions imposed by the West. France’s ageing nuclear infrastructure is also expected to reduce the continent's energy supplies.

To conserve energy supplies during peak demand over the winter, EU member states have agreed to curb electricity consumption by 10% on a voluntary basis, and make a mandatory cut of 5% during peak hours each month.

Consumption in much of the EU fell by 4.3% in September, and early indications show it could fall by 10% or more in October, according to Reuters calculations, using data from the European Network of Transmission System Operators for Electricity (ENTSO-E). Swings in power consumption can reflect differing weather conditions and the behaviour of consumers and businesses. However, it may also reflect evidence of a predicted downturn in economic activity.

The Japanese government is looking at extending a 60-year limit on the operation of nuclear plants. Nikkei Asia says new regulations under consideration would allow repeated extensions if approved by the Nuclear Regulation Authority. It was citing a draft report by the Ministry of Economy, Trade and Industry.

New regulations put in place following the 2011 Fukushima Daiichi nuclear incident stipulate that a reactor can only be in operation for 40 years. This could then be extended by 20 more years subject to regulatory approval. Four of Japan’s 33 reactors available for commercial operation have so far been approved to continue for up to 60 years.

Japan has been trying to tackle tight energy supplies resulting from the Ukraine conflict and soaring prices. Prime Minister Fumio Kishida has said he wants to restart inactive nuclear plants as well as look at extending the lifespan of existing ones. Japan has kept most of its nuclear plants idled since the 2011 earthquake and tsunami.

As the UK looks for ways to make all new heating systems low-carbon by 2035, the CEO of CarbonLaces, Madhuban Kumar, and Utilities Energy Transition Consultant at Accenture, Jonathan Gilmour, explain how heat pumps will help this push. The UK government has predicted growth of 600,000 heat pump installations per year by 2028; however, there are challenges that the UK government will need to overcome.

The rise in petroleum prices in 2022, with oil topping $120 a barrel at one point, has boosted calls for the imposition of windfall taxes to be levied on energy companies. Professor Aaron Yoon from Northwestern University sets out why compelling companies to reinvest some excess profits into alternative energy projects could boost their value.

Given the scale of today’s net-zero challenges, no single organization or industrial sector can tackle decarbonization alone. CEO of Holcim, Jan Jenisch, argues that cross-sector collaboration is key to strengthening market demand for low-carbon solutions across the industrial value chain.

To learn more about the work of the Energy, Materials, Infrastructure Platform, contact Anne Therese Andersen: AnneTherese.Andersen@weforum.org