Spanish Gas Consumption +20% in October y-o-y

Spanish natural gas consumption surged in October in contrast to northwest Europe, as lower prices amid the introduction of a price cap have incentivized producers to burn gas.

• While the EU and IEA advised European countries to introduce gas saving measures, Madrid’s price limit on gas for power generation led to a surge in gas demand, as plants leveraged lower costs under the price cap.

• Earlier this year, Spain and Portugal introduced a gas price cap on natural gas for electricity generation. The measure will apply until 31 May 2024.

• Spain’s natural gas demand has risen around 80% yoy in October, according to the Spanish gas network operator Enagas. This is despite the new energy-saving plan approved by the Spanish cabinet in early October which targets a natural gas consumption cut by 13.5% by March.

• Despite higher consumption, Spain’s gas storage levels stood at 94.85% on 2 November, data from AGSI show.

• The European Commission has had discussions over an EU wide gas price cap, but nothing has been finalised as price caps could increase demand for natural gas and subsidize power for non-EU power trading partner such as Switzerland or the UK.

• European gas demand dropped by close to 25% in October on unseasonably mild weather and continued demand destruction in industry. This translates into a drop of 10 bcm compared to last year, IEA data show.