Does Russian gas weaken energy security in Europe? Lessons from the Baumgarten incident. CEPS Commentary, 19 December 2017

Hassel, Arndt and Egenhofer, Christian (2017) Does Russian gas weaken energy security in Europe? Lessons from the Baumgarten incident. CEPS Commentary, 19 December 2017. [Policy Paper]

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Abstract

On December 12th, an explosion in the Baumgarten gas hub in Austria, a key distribution knot for the European gas market, led to a disruption in gas transmission that affected a large part of Europe. The incident caused Italy to declare a state of emergency and disrupted supply to the UK from Belgium and the Netherlands. Simultaneously, an outage in Norway caused flow reductions from Europe’s largest gas production site “Troll”, which compounded the supply problems. Amplified by a demand peak in the UK due to unusually cold weather, prices were directly affected, with short-term prices in the UK reaching a four-year high (up 35%).[1] The incident has affected the gas market and may lead to further repercussions throughout the remainder of the winter, when demand stays high due to household consumption for heating.

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