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Maguire: The boom in renewables in Europe is causing a fall-off of gas demand.

In recent years, the question that has defined Europe's energy history has been whether there is enough gas in the region. This question is becoming outdated.

After the Russian invasion of Ukraine, traders, policymakers and utilities became obsessed with storage levels, LNG cargo arrivals, and winter weather forecasts. Gas inventories were the main measure of Europe's security in terms of energy.

A new trend is emerging in the power system of the continent, suggesting that Europe may be increasingly asking the wrong questions.

It is not a question of whether Europe will be able to secure sufficient gas. The question is not whether Europe can secure enough gas supplies.

The combined electricity generated by Europe's solar and wind farms will surpass the output of gas-fired plants in 2026 for the first time ever.

This may seem like another milestone in the clean energy industry. It could be a sign of a major structural change in the European gas market.

RENEWABLES ARE NOW THE CENTRE OF ATTENTION

Gas used to generate more electricity than the combined output of Europe's wind- and solar-powered fleet.

Data from the energy think tank Ember?shows that in 2016, solar and wind combined monthly output generally hovered around 30 to 45 terawatt-hours (TWh), whereas gas-fired production often exceeded 100 TWh.

Today, the gap is gone.

Solar and wind combined output has increased to 80-110 Terawatt Hours per month, while gas-fired power generation has been steadily losing ground.

Renewable generation has been able to match or exceed?gas production for long periods of time in 2025 and 2026.

This is not just the result of good weather.

Gas-fired power generation in Europe has increased modestly from 250 gigawatts (GW) to 400 GW over the last quarter century. Over the same time period, wind and solar power capacity has risen from 20 GW up to 750 GW.

In Europe, wind and solar power is now installed at nearly double the rate of gas-fired power.

That distinction matters.

Weather can explain temporary shifts in generation. Changes in the footprint of generation fleets drive structural shifts.

Europe has been steadily building a power system based on renewable resources, rather than fossil fuels, for the past two decades.

After installing sufficient renewable capacity, the decline in fossil?generation is no longer a policy goal but a mathematical result.

The data suggests that Europe has crossed this threshold.

Fewer months of gas burning

Even more interesting are seasonal generation statistics.

Gas has historically been the mainstay of Europe's energy system. Demand peaks in winter, but falls in spring and summer.

Now wind and solar are increasingly dominating the April-through-October period.

By 2026, the renewable energy sector will have reached new highs and coal and gas production will be at multi-year lows. As renewables provide a greater share of electricity, the traditional gas-burning season is getting shorter.

This could be a game changer for the gas market.

Each month, the use of renewable energy reduces gas consumption and lowers imports of gas. This is a major source of gas demand in Europe.

HIDDEN STORAGE STORY

Gas inventories may have the most significant impact.

Storage has been a crucial insurance policy in Europe since 2022 against disruptions of supply and seasonal demand spikes.

If the power sector gas demand continues to shrink, Europe might not need as much gas in storage during summer or as little gas withdrawn during winter.

Storage is essential for cold snaps and times of low renewable production. As wind and solar power continue to replace gas, the continent may find that its need for gas inventory is gradually decreasing.

The debate is now "How much gas does Europe actually need?" This shifts the debate from "Does Europe have enough gas?" to "How much does Europe really need?"

BRIDGE FUEL NOT MORE?

The trend is reinforced by the broader historical context.

Natural gas has been the main replacement fuel in Europe for power generation and industry since the 1990s.

Renewables now pose a similar threat to gas.

Years ago, policymakers referred to gas as a fuel that bridged the gap between coal and "renewables".

The power system in Europe is increasingly looking like it's approaching the other side of this bridge.

Europe does not just produce cleaner electricity with each new wind farm or solar park. It is reducing the amount it has to import, store and burn.

For a continent who spent years worrying about whether they would have enough fuel to make it through the winter, the ability to use less gas in the first instance may be the most significant energy development.

These are the opinions of the columnist, who is also an author. This column is great! Open Interest (ROI) is your new essential source of global financial commentary. Follow ROI on LinkedIn, X and X. Listen to the Morning Bid podcast daily on Apple, Spotify or the app. Subscribe to the Morning Bid podcast and hear journalists discussing the latest news in finance and markets 7 days a weeks.

(source: Reuters)