The collapse in gas consumption in homes and businesses is already double that of confinement | Economy

An operator of an aluminum rolling company in Alicante.
An operator of an aluminum rolling company in Alicante.Pep Morell (EFE)

The sharp decline in the price of natural gas in recent days, which is opening a vein of unexpected optimism at this point in the year, has many roots. The biggest of all of them is the full sign hanging on the underground tanks, full for the winter and that have caused the ports not to admit —temporarily— not one more methane tanker. Or the temperatures, milder than usual in autumn and pointing to a mild start to winter. But there is one more root, and a deep one: the sudden collapse in conventional gas consumption, both due to the crazy prices of recent months and due to the constant calls for savings and the incipient cooling of the economy. There is no precedent for something similar: the crash is even higher than that recorded in the hardest weeks of the pandemic.

The demand for gas from homes, industry and companies in general sank 37% in August and 38% in September compared to the 17% drop registered in April 2020, with the Spanish economy closed to the ground due to confinement decreed to curb the spread of the coronavirus. So far in October, consumption is following the same path: it falls more than 33% until this Wednesday, according to the mobile data of the gas system operator (Enagás).

The collapse of recent months has been especially pronounced in the secondary sector, which is very sensitive to energy costs and where the brutal increase in the price of gas (which has multiplied by ten compared to pre-crisis levels) has caused a slowdown in dry in the production of some companies, unable to assume this new environment. In September, the demand for gas in the industry sank almost 41%, with the metallurgy and steel industry being the hardest hit sectors, and ERTE in giants such as ArcelorMittal until the price storm subsides.

In the case of homes, the moment of truth will come in the coming months: the greater or lesser use of heating in winter is what determines the bulk of their annual consumption, while domestic hot water and kitchens represent a much smaller fraction.

More gas for electricity

The burning of gas to generate electricity follows a completely opposite pattern, to the point of erasing any hint of savings in the Spanish gas market as a whole: in August and so far in October it has doubled, and in September it skyrocketed. more than 50%. The rebound even leaves Spain as one of the only four EU countries in which the total demand for this fuel is even higher in 2022 than in 2021.

This strong increase in the use of combined cycle plants responds, above all, to temporary reasons: the increase in electricity exports to France due to the stoppage of its nuclear plant for technical reasons —something that should begin to improve in the coming weeks, with the resumption of activity in several reactors— and, to a lesser extent, in the lower contribution of hydraulics due to the drought. In the first fortnight of October, wind generation also faltered due to lack of wind, according to experts from the ASE Group in its latest report for clients.

“Massive movement” of families from the free to the regulated market

The price gap between the free gas market (in which conditions are negotiated by marketers and customers) and the regulated market (in which the price is set by the Government) is leading to an enormous flow of domestic customers towards the latter . “We know that there are massive movements [de clientes] towards the regulated rate”, as confirmed this Wednesday by the president of the National Commission for Markets and Competition (CNMC), Cani Fernández, at an event organized by Redeia (Red Eléctrica de España).

Numerical support for the words of Cani Fernández will come in the coming months, when the entity he presides over publishes the exact figures of customers who have chosen to take refuge in the regulated market in the face of exorbitant gas prices in the free market. These figures will increase as consumers who live in blocks of flats with community boilers (around 1.7 million customers) can adhere to the rate of last resort (TUR) after the reform approved in the last Council of Ministers .

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