23 July 2010
A new report on the European energy outlook indicates that the situation is not as dire as the mainstream media have portrayed. Improved interconnections within Europe and continuing advances in energy efficiency suggest security of supply is reasonably well assured.
The recession may actually have been the critical factor in securing European energy security of supply. First, the collapse in industrial production has eased bottlenecks in the short term. Second, the EU's fiscal stimulus package in response to the downturn has brought investment in internal connections.
However, whilst the recession may have provided a stay of execution, dangers persist. In particular, it appears that the period between 2016 and 2020 will see problems emerge. Nuclear and Coal fired generation will be retired before substantial new baseload capacity is ready so placing heavy requirements on gas just as global liquid natural gas supply growth slows.
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