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. Energy, climate, geopolitics, mobility, urbanism. Earlier:

Athens, Greecenikostsafos.github.ioJoined April 2011

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Nikos Tsafos’s Tweets

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Jan 5, 2021

For years, I distrusted sidewalks. I grew up in Athens, where sidewalks are cramped, cracked, or just missing. I learned to walk on the street, something I had to “un-learn” after moving overseas. But I spent time in Athens recently, and it all came back. A thread—on sidewalks.

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Greece in 2022 👇 ✅ Gas consumption fell by 19%. ✅ Exports rose almost 3x (more if one adds IGB). ✅ LNG imports increased by 54%. A remarkable adjustment during a very difficult year—and a material contribution from Greece to European energy security.

Great visual by the

on manufacturing capacity across sectors and throughout the clean energy value chain. Besides showing the major role of China, this graph also underscores areas where Europe and/or the United States have a strong foundation to build on going forward.

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Jan 9

Αστοχία και λάθος μου σε μια περίοδο που εργαζόμουν ως αναλυτής στις ΗΠΑ και δεν είχα καμία επαγγελματική σχέση με την ελληνική κυβέρνηση. Το έσβησα.

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Dec 20, 2022

The price intervention is part of a broader response strategy. It is an important signal to a market where prices have been disconnected from fundamentals for over a year. It is one (huge) step in a long journey. The work to secure European energy continues.

The market correction mechanism intervenes in a market under duress to prevent prices from reaching excessive levels at which little additional is gained—no more supply, no more demand reductions. And it comes with reviews and safeguards to track and ensure its success.

Another fear was that the market correction mechanism would reduce liquidity at exchanges and increase volatility. But this financial stress is happening on its own: open interest is falling, and volatility is very high already. (Graphs from ICE and a study done for ICE.)

Even after TTF fell from its summer peak, and even after the premium of TTF to LNG declined, LNG send-out in Europe reached an all-time high. It’s hard to say these excessive prices were needed to attract supply. Europe can attract LNG at much lower prices.

An intervention should not jeopardize Europe’s ability to import gas. This graph, by

@SparkCommo

, shows that LNG came to Europe at a sharp discount to TTF—at its widest, LNG was 77 €/MWh cheaper than TTF. Europe could attract supply at prices *much* below TTF.

Consider demand. Q3 gas prices were ~2x Q2 prices. Yet demand fell less in Q3. There is a lot to unpack here—different sectors, the comparison base to 2021, etc. But the link between higher prices and lower demand is not linear after some point. (Graph from the

The mandate was to limit excessive gas prices. But what is “excessive?” One definition is “unnecessary.” Europe gained very little when prices went over 180 €/MWh—no more gas supply, no more demand reductions. These prices were unnecessary. Excessive.

The parameters of the intervention were laid out in Article 23 of a proposed Council Regulation published on October 18. The objectives: ✅ Do not jeopardize supply ✅ Ensure demand keeps falling ✅ Protect gas flows within Europe ✅ Do not trigger added financial stress

The starting point for the intervention is a diagnosis of market failure in European gas: ✅ Prices untethered from fundamentals ✅ Manipulation by a dominant player ✅ Sharp drops in liquidity ✅ Extreme volatility In this context, the question is *how* to intervene, not if.

On December 19, the energy ministers of the European Union agreed on a Market Correction Mechanism for natural gas. Why do we need such a mechanism? What might it accomplish? A thread.

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Prime Minister GR

Dec 19, 2022

Today is another milestone in our long effort to shield our citizens and businesses from excessive gas prices caused by Russia’s invasion in Ukraine. The market correction mechanism -a GR proposal submitted 9 months ago- has finally been adopted by Europe's energy ministers.

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Happy to welcome

to Athens. We had a productive meeting about the solutions we can pursue for the common challenges the EU is facing, and how we can further support our citizens who are dealing with high energy costs.

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Ομιλία στη σύνοδο της 27ης Διάσκεψης των Μερών της Σύμβασης του ΟΗΕ...

Nov 8, 2022

"I deeply believe in the energy transition. It is imperative. It is unavoidable. The energy transition is not just about mitigating risk. It’s an opportunity. It is also a strategic necessity. Low-carbon energy means energy security. This much is clear."

youtube.com

Ομιλία του Πρωθυπουργού Κυριάκου Μητσοτάκη στη σύνοδο της 27ης Διάσκεψης των Μερών της Σύμβασης του ΟΗΕ για την Κλιματική Αλλαγή (COP27).

Prime Minister GR

Nov 8, 2022

The GReco Islands initiative aims to transform the islands of Greece into models of green economy, energy self-sufficiency, digital innovation & sustainable mobility. Great video on how Greek islands are setting the paradigm for action against climate change. Take a look. #COP27

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Nov 3, 2022

In short— ✅ Europe goes into winter well prepared. ✅ Spot prices down but month-ahead still high. ✅ Gas storage being full is not enough. ✅ European LNG benefited from drop in Chinese LNG. ✅ Loss of Russian gas will hurt in 2023 too. ✅ Price formation still problematic.

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There is this idea that we filled gas storage too quickly. The data does not really support this. Injections were high but not unprecedented. Plus, demand was down so the call on gas was lower. The culprit seems to be the need to fill at any price.

The decline in European prices shows a strong relationship with the deceleration in storage injections after the middle of August. Once European firms became more selective in filling storage, prices crashed.

European gas prices barely responded to the sharp but silent curtailment of Russian gas exports until early June. Then TTF spiked and kept rising despite modest changes in actual flows. When Nord Stream was finally shut, prices started to fall. Lots of sentiment here.

The fall in European gas prices allows also for some retrospective analysis. So far, there is no impact on LNG imports. In fact, October imports were up versus August and September. The idea that Europe *needed* to pay these prices to attract supply looks very tenuous.

Europe is preparing for a winter with little Russian gas, but Russia has still delivered around 60 bcm so far this year. The current delivery rate is only around 2 bcm a month. What Europe did this year in LNG it might need to repeat in 2023. That’s quite a challenge.

Europe gas demand seems to falling across sectors. That said, real-time data is poor, and different sources show different estimates (graph from Greg Molnár). Also: Not all demand reductions are the same. Beware of economic ruin masquerading as "energy savings."

It is hard to overstate the significance of China's zero covid policies on European energy. The EU imported an additional 41 bcm of LNG through October. China's LNG imports were down 21 percent. Normally they're up 27 percent. The delta between +27 and -21 percent? 43 bcm.

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Europe needs gas storage to meet winter demand. But storage is not enough. Depending on the weather, and other factors, storage typically meets 23 to 40 percent of winter demand. A steady stream of production and gas imports remains essential.

European gas storage is nearly full—and that's great news. But remember: we have not stored an *excess* amount for winter. We have stored a solid amount. This is still a remarkable accomplishment given the loss of Russian gas. But it's not an unprecedented buffer.

Parenthesis: The disparity between day-ahead (spot) and month-ahead prices can produce misleading comparisons. This picture from Enagás, for example, shows day-ahead prices in Europe and month-ahead in Asia. This discount does not actually exist. It's a temporal disconnect.

The decline in TTF has also narrowed the premium over the Japan Korea Marker (JKM), the most relevant price for spot LNG deliveries in Asia. Does this mean competition with Asia is more intense? Not yet. TTF traded at a huge premium to LNG deliveries. That premium is now gone.

The decline in European gas prices has been remarkable. But we've also seen a sharp disconnect between month-ahead and day-ahead prices. Day-ahead prices are much lower because there is too much gas and nowhere to store it. But the month ahead price is still above 100 €/MWh.

European natural gas prices have dropped by 2/3 since their peak in August. This is very good news. Europe is heading into the winter in a better position than I could have ever imagined. But it's way too soon to declare victory. Let's review.

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Finally: there is a tendency to frame this crisis—this crisis of hydrocarbons, of gas, of Russian gas—as an indictment of the energy transition. This graph is by no means the whole story, but it shows an important piece that we cannot forget: more renewables = lower prices.

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The case for new LNG supply is complicated by the long payback period for new projects—with interferes with our net zero targets. But there is a way to shorten this payback period by paying a premium for the gas. Given how costly the alternative is, this is a path to explore.

Without Russian gas, Europe is short *a lot* of gas—anywhere from 70 to 170 bcm by 2030. Absent any new long-term contracts, this gas must be sourced from the spot market—with all the price exposure and volatility that this entails.

Europe will need a lot of LNG through 2030 even if we assume a sharp reduction in demand (shown here is the demand curve for the Announced Pledges Scenario, or APS). We really need to think about how to secure this LNG.

I never tire of this chart because 1 ½ years since gas prices started to get out of control this graph can still surprise me. Versus Sept 2020, TTF went up almost 25 times. 25x. Yes it then fell, but it's still hard to fathom what this means. Our systems are not built for this.

The increase in energy prices represents a *massive* macro-economic shock. The global trade in natural gas is usually $200 to $400 bn. This year it might reach $800 bn. Europe accounts for most of this increase on the import side. This is a shock whose ripple effects will last.

The

WEO is always a delight to read—full of beautiful graphs and penetrating insights, a roadmap for building the energy system of the future. This year, I want to highlight a few charts that really underscore Europe’s energy security predicament. 🧵

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Prime Minister GR

Oct 18, 2022

I welcome the comprehensive package proposed by the President of the European Commission

@vonderleyen

and especially the inclusion of two proposals Greece has long called for: a price correction mechanism at TTF and circuit breakers in energy derivative markets.

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