Fatih Birol warned summer could be difficult for energy markets.
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- Europe could face a tough winter of energy rationing if efficiency doesn’t improve, the IEA’s executive director said.
- “I wouldn’t exclude the rationing of natural gas in Europe, starting from the large industry facilities,” Faith Birol old the Financial Times.
- Pakistan is already trimming Saturday from its work week to address energy shortages.
Europe may need to ration its energy supply if efficiency doesn’t improve and demand doesn’t cool, the International Energy Agency’s executive director warned.
If winter weather is harsh and drags on while demand in China ramps up as COVID lockdowns continue easing, then rationing is on the table unless energy efficiency starts improving quickly, Faith Birol told the Financial Times.
“I wouldn’t exclude the rationing of natural gas in Europe, starting from the large industry facilities,” he said.
Birol suggested better efficiency, renewable sources, and “making the most of existing” energy supplies would help ensure energy security, rather than starting newer and bigger fossil fuel projects.
The warning comes as Germany and Austria have also sounded the alarm over energy supplies in recent weeks, with Berlin saying that parts of large industrial businesses could be subject to a shut-off if the situation tightens.
Meanwhile, the US and EU are looking to choke off Russia’s energy exports, even as European countries rely more heavily on Russia’s supply of gas for its energy grid. While the US has emerged as a top alternative source for Europe, concern is mounting that the Kremlin is using natural gas as a weapon to punish countries that have supported Ukraine’s defense efforts.
Russia has already cut off countries including Bulgaria, Finland and Poland for not paying Moscow in rubles, as President Vladimir Putin has demanded.
Other countries are feeling the energy crunch too and have already taken steps to ration. Pakistan is trimming Saturday from its work week to address energy consumption concerns that have set off blackouts and is considering making Friday a mandatory work-from-home day, Bloomberg reported.
