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Hydro & wind double act help protect Austria from Russian gas loss: Maguire

Austrian power generators are well placed to withstand the loss of pipeline gas products from Russia thanks to tape-record wind power output alongside the highest hydro generation total in over a years.

An agreement conflict between Russian energy giant Gazprom and Austrian gas importer OMV resulted in Gazprom cutting off 50 years of gas streams to OMV previously this month.

But energies in Austria are in a strong position to make do with just minimal gas supplies over the next numerous months, thanks to the continuous reconfiguring of the Austrian power system away from fossil fuels.

If Austria manages to shake off its loss of gas supplies right before winter season - when gas usage is generally greatest - it might be a fresh blow to Russian exporters who are already reeling from greatly lower sales to northern European markets.

A successful Austrian pivot away from gas could also function as a design template for neighbouring nations, which could feasibly also cut their collective gas usage and balance out power losses with increased imports through their currently interconnected grids.

LARGE HYDRO

Austria's network of more than 3,000 hydroelectric power plants is one the biggest in Europe, and forms the backbone of Austria's power system by providing more than two-thirds of the country's electrical power.

Hydro electrical power output over the very first 10 months of 2024 is up 17% from the same months in 2023 and the highest in at least a decade, according to energy think tank Ash.

High rainfall in late 2023 and early 2024 helped lift Austria's reservoir levels to multi-year highs from the start of the year.

Heavy rains in September, which triggered localized flooding, then recharged the nation's pumped storage system ahead of winter season.

Electricity production from hydro dams was 4.15 terawatt hours (TWh) in October, according to Ember, up 65% from the very same month in 2023.

High hydro storage levels combined with continuing strong run-of-river hydro production implies power companies will have the ability to release high levels of hydro electrical power production in November as well.

And as winter is the peak duration of Austrian electrical power and power usage due to greater heating demand, these topped-up hydro resources will enable Austrian power companies to cut back on the use of natural gas over the near to medium term.

That will eat into total gas use by the country, as gas-fired generation usually peaks throughout winter when power firms utilize gas-fired generation to plug any hydro power shortages during the coldest months of the year.

WIND POWER

Greater wind power generation is likewise eating into gas demand in Austria.

Over the very first 10 months of 2024, wind electricity output in Austria was 7.7 TWh, which was 18% more than over the same period in 2023.

That total was also 2.5 times greater than gas-fired electrical power output over the very same duration, sealing wind farms as the second biggest source of Austrian electrical power behind hydro dams.

The timing of Austrian wind power production peaks is also working against gas use potential in the country, as wind speeds in main and southern Europe tend to peak throughout the winter when gas usage has actually historically been highest.

If wind speeds follow that seasonal trend again in 2024-25, wind generation should stay greater than gas generation throughout the coming winter season, which would damage general gas use in Austria at a vital time for the country.

In all, if Austria can successfully brush off the loss of gas flows right before winter season it would be a bitter blow to Russian gas exporters, as it would demonstrate a further damaging in gas reliance at the heart of Central Europe.

The mix of high hydro and wind production could also serve as a design template for surrounding countries, who remain in the midst of charting their own energy shift roadmaps and are likewise eager to cut reliance on energy imports.

Neighbouring countries Czech Republic, Hungary, Switzerland, Italy, Slovenia and Slovakia all have extensive interconnected grids with Austria, therefore could probably also make cuts to their cumulative gas intake and offset any power losses with increased regional imports.

The opinions revealed here are those of the author, a market analyst .

(source: Reuters)