Home | Natural gas | Importance
Natural gas steadily gaining importance
 
  Contact Deutsch  
Large-scale crude oil exports by the former Soviet Union to Western Europe predated those of natural gas by about a decade. While Soviet exports totalled just under 16 million tons (MT) of crude oil back in 1960, the volume of exports from what are now the CIS countries had multiplied to more than 200 MT by 2003. Oil will retain the largest share of European energy balances over the longer term, although its share is projected to decline from over 40% in 2000 to 37% in 2030. The main reason for this is the substitution of natural gas for oil in heating and electricity generation.

Reasons for the increase in gas consumption for electricity generation
Strong growth in electricity consumption holds the key to rising gas demand in Europe over the next three decades. All projections of European gas demand see the power sector accounting for 65-80% of growth over this period. According to the calculations of the International Energy Agency (IEA), gas consumption in Western Europe for electricity generation is set to increase from about 115 billion cubic metres (BCM) in 2000 to more than 400 BCM in 2030.

What other reasons are there for using natural gas?
- Gas is a cheaper fuel than coal for electricity generation.
In most European countries, new nuclear power plants are either politically unacceptable or commercially too risky for private operators.
Renewable energy sources are much more expensive than electricity generated by fossil fuels and are thus not expected to account for more than 20% of electricity consumption over the next 30 years.

Natural gas also has significant advantages over other fossil fuels with respect to harmful emissions. In support of the Kyoto Protocol's greenhouse gas reduction targets, the European Union defined a legal framework for trading in emissions certificates, which came into effect in 2005. Taken together with the general tightening of environmental standards by the European Commission, this will make for an added incentive to favour gas in the coming decades. As long as the differential between gas and coal prices does not widen too greatly, gas will remain the most commercially attractive fuel for electricity generation.

While demand is expected to increase considerably over the next 30 years, it is forecast that European gas production volumes will decline. The UK is projected to be importing around half of its gas supplies by 2010 and as much as 80% by 2020, by which time Dutch reserves are also likely to show the first signs of dwindling. While Norwegian gas exports are continuing to increase, they will peak at 95-100 BCM by 2010. Any further increase will require the discovery and development of new reserves.

 
 Further information 
 
Worldwide gas demand >>
 
 
Leading gas exporters >>
 
 
European gas balances >>
 
 
Oil balances in the European Union >>
 
 
Cost of coal and gas-fired electricity generation >>
 
 
Liquefied natural gas as an alternative to pipeline gas >>
 
 
 
 
Top | Back 
© Centrex Europe Energy & Gas AG 18.10.2017Legal Notice