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When will effects of Russian gas shut-off be felt in Denmark?

Gas prices on the European market shot up by around 25 percent on Monday after Russia last weekend indefinitely cut supplies to Europe via the Nordstream 1 gas pipeline.

When will effects of Russian gas shut-off be felt in Denmark?
Pipes at the landfall facilities of the 'Nord Stream 1' gas pipeline in Lubmin, Germany in July 2022. File photo: Annegret Hilse/Reuters/Ritzau Scanpix

Residents of Denmark must be prepared to receive extra-large bills in coming months, an analyst said in light of the development.

“Danish gas consumers will initially be hit hard by these increases, but so will electricity customers because gas is very important in electricity production,” senior economist with Sydbank, Søren Kristensen, said to news wire Ritzau.

The new, high price of raw gas will take one to two months to become apparent in prices paid by consumers, Kristensen said.

An increase in gas prices was registered on Monday, but this followed on from some earlier reductions to the price.

“So despite the increase on Monday we are not quite hitting the peak we had during August,” Kristensen said.

Climate, Energy and Critical Supplies Minister Dan Jørgensen minister on Saturday said Denmark is entering an uncertain autumn and winter after the Nord Stream 1 gas pipe, which supplies Russian natural gas to Denmark via Germany, was closed indefinitely on Friday.

READ ALSO: Denmark faces ‘uncertain winter’ after Russia halts gas supplies to Europe

Monday afternoon saw the price of gas reach 270 euros per kilowatt hour, notably lower than the peak of 340 euros during August.

The Russian decision to switch off the gas is nevertheless directly responsible for Monday’s increase, the Sydbank analyst told Ritzau.

“It’s supply that is affected when Russia again says no gas will be sent through Nord Stream 1,” he said.

“And it is also related to concerns about what we are looking at during the winter. Many people are scared about whether they’ll get any gas at all,” he said.

A price increase of the magnitude seen on Monday is rare, he also observed.

“These are some incredibly drastic price increases,” he said.

“A few years ago, an increase of more than 20 percent did not have a huge value. But because of the [high] prices today, this change is unheard of in kroner and øre,” he said.

The European gas price was around 20 euros per kilowatt hour at the beginning of 2021, meaning prices are well over 1000 percent higher than they were in January last year.

Jørgensen said on Saturday he was considering new energy saving measures after Russian gas giant Gazprom said the Nord Stream pipeline would remain shut until a turbine is repaired.

The Nord Stream 1 pipeline normally sends enough natural gas from Russia to Europe to heat around 26 million homes, but this supply has been significantly reduced since Moscow invaded Ukraine in late February. The line was shut down by Russia last week, ostensibly for maintenance work, but not reopened on Saturday as initially advised. 

A draft 2023 budget presented last week by the government sets aside funding for inflation relief but did not specify the recipients of such spending.

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ENERGY

Why the energy crisis isn’t over yet in Denmark

Denmark has cut the majority of its consumption of Russian gas but it is too early to disregard all energy saving measures, experts advise.

Why the energy crisis isn’t over yet in Denmark

Gas stocks in Denmark remain high despite the winter having reached the halfway mark, but it would not be prudent to drop good energy saving habits, broadcaster DR writes.

Before the Russian invasion of Ukraine, 40 percent of the natural gas used by Europe came from Russia. That has now been reduced to around 8-10 percent, DR reports.

This means that the EU has moved towards its target of becoming independent of Russian gas, a senior consultant in the Danish energy sector told the broadcaster.

“We have put plans into action and with the amount of gas we are saving now, we are almost at the point of being able to go without Russian gas,” Kristian Rune Poulsen of Green Power Denmark, the interest organisation for the energy sector, said.

The reason for this is that imports of liquid gas from North America and the Middle East have been increased, but also because consumers and businesses across Europe have managed to reduce consumption.

“In Denmark, we used 37 percent less gas in 2022 compared with 2021. How much of this is actual savings and how much is from switching to other fuels, we don’t yet know for sure,” Poulsen said.

Europe currently has good gas stocks and prices are expected to be stable for the rest of the winter.

READ ALSO: Low European gas prices ‘will benefit’ energy consumers in Denmark

But it’s too early to call off the energy crisis and turn up thermostats without a care, according to a number of experts who spoke to DR.

“There’s no doubt that it’s a huge success that we’ve succeeded in saving 20-25 percent on gas and significantly increased imports of liquid gas,” Brian Vad Mathiesen, energy researcher at Aalborg University, said to DR.

“But we still get Russian gas through Turkey and Ukraine, and countries like Hungary and Romania are still dependent on Russian gas,” he said.

Moscow could therefore still use gas as leverage to drive a wedge between European countries, he stated.

A senior researcher in international relations also said that measures to conserve gas should continue.

“We’ve been good at cutting back. But if we stop saving now, we’ll run into problems next year,” Trine Villumsen Berling of the Danish Institute for International Studies told DR.

Much of the gas currently stored was originally supplied by Russia, she noted. Power plants still need to use gas to produce energy when weather conditions reduce wind output, she also said.

“We need Danes to still have those good habits. We must remain aware of how we use energy and how much we turn on the heating for quite a while yet,” she said.

“We must remember that in future we won’t get much gas from Russia and that we are only in this healthy situation because we have been good at conserving,” added Poulsen of Green Power Denmark.

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