Projecting EU demand for natural gas to 2030: A meta-analysis

Gas demand projections for the EU27 from a variety of sources are compared. Projected demand varies widely between sources, even when similar rates of economic growth and policy strength are assumed. The divergence is shown to result from differing assumptions concerning future energy intensity, on the one hand, and the future contribution of nuclear power and renewables (RES) to electricity generation on the other. The variation with time of some of these projections is also examined. It is found that the gas demand projected by both the International Energy Agency (IEA) and the European Commission (EC) for 2020 and for 2030 has tended to decrease with each successive projection. This is understandable, since the penetration of RES-E has continued to exceed expectations. However, in an economically depressed, post-Fukushima Europe, estimates of future growth in both RES and nuclear generation may need significant revision. The Energy Efficiency Directive, as agreed by the Council of the European Union and the European Parliament in April 2012 (Council of the European Union, 2012), will also impact significantly on future gas demand, even though the measures incorporated are weaker than the original proposal. The analysis presented here shows that a “nuclear decline” due to the Fukushima disaster is seen to moderate, rather than reverse, projected demand decay. A significant shortfall in projected RES capacity, if it were to occur, constitutes a potential source of additional gas demand.Although the emphasis in this paper is on the EU27 as a whole, consideration is given to the regional heterogeneity of each of these impacts. Hence, although aggregate demand growth for the next decade or two is likely to be moderate or (more probably) negative, local demand growth in some regions may be significant. Ensuring adequate access to these specific regions – via interconnection to their EU27 neighbours, and/or directly from extra-EU sources – will therefore be essential. Hence, implementation of the Third Energy Plan should remain a priority.

► Twenty-three projections of EU27 gas demand are analysed.
► The principal factors responsible for divergent estimates are identified and discussed.
► Two additional scenarios are considered, one in which nuclear power generation is curtailed, and one where member states fall short of the RES targets.
► Regional as well as EU-wide impacts are considered.
► The author concludes that, even in a pessimistic scenario, EU27 gas demand is unlikely to rise before 2020, and may remain close to current levels out to 2030.