Spain Triggers The Burning Of Russian Gas To Generate Energy

Spain is turning heavily to expensive natural gas to meet its energy needs, just as Europe struggles to cut consumption and avoid rationing . Gas demand for power generation increased 126% in July compared to the same month a year earlier, according to network operator Enagas. At the same time, imports of natural gas from Russia have grown by 32.9% (June data) , to 8,751 gigawatt hours (GWh), its highest monthly level since the Strategic Reserves of Petroleum Products Corporation ( Cores) has records, that is, 2004.

Combined heat and power generation, or CHP, which is capable of optimizing production by producing both electricity and thermal energy, accounted for just 4% of the country’s energy mix, down from 10% a year earlier.

CHP’s decline is putting pressure on industries, ranging from food and paper to refining and chemicals, that had invested in harnessing the technology. Meanwhile, this lower production is being compensated by a greater generation of less efficient and more polluting technologies, such as the combined cycle of gas and, to a lesser extent, coal.

“The situation is serious,” says Roger Medina, an economist at the Barcelona School of Economics. “A drop in CHP reduces efficiency, increases pollution and has a direct impact on industrial production,” in statements to the Bloomberg agency .

The share of combined cycle and coal in total Spanish electricity generation more than doubled in July, reaching 32% and 3.3%, respectively. All in all, CO2-emitting technologies represented 42% of the total mix in Spain, an increase of 11 percentage points compared to the same month of the previous year. The harsh drought that halved hydroelectric production also contributed to that trend.

Russian imports
On the other hand, imports appear. According to data published this Wednesday by Cores, Russia was Spain’s second largest supplier that month , being the origin of 24.4% of the gas received on those dates, only behind the 10,618 GWh from the United States, which was consolidated as main supplier, with 29.6% of the total.

According to the history by geographical areas and countries, the previous import record from Russia was set just one year earlier, in June 2021, when they reached 6,587 GWh, transported in the form of liquefied natural gas (LNG).

In the midst of the diplomatic crisis with Spain due to Madrid’s change of position regarding Western Sahara, Algeria was in third position, with 7,762 GWh, 21.6% of the total, although this volume was close to 53 % lower than the one registered a year before.

During June, imports of natural gas, regardless of origin, grew by 5.3%, to 35,883 GWh, of which 77% came as LNG, and the remaining 23% through gas pipelines.

LNG imports
The accumulated data also shows an unstoppable evolution of LNG imports, which allow the arrival of this raw material in ships, which have shot up nearly 67% in the first half of the year, coinciding with the growing weight of the United States .

In fact, North America represents 34% of the total imports made between January and June, according to Cores statistics, which places Russia as the fourth supplier so far this year.

Taking into account the total volume of these operations, Spain has imported 226,594 GWh in the first six months of the year, 13.9% more than in the same period of 2021.

Of this percentage, 73%, 165,868 GWh, came in the form of LNG through methane tankers, a formula that grew by 66.9% in year-on-year terms, while the rest, 60,726 GWh, came as natural gas, for gas pipeline, a technique that falls by 39%.

This evolution of the annual accumulated is explained by the diversification of the origins of this raw material, mainly originating in the United States in recent months, which has already sent 78,156 GWh to Spain in the first half.

Despite the political disagreements, the pre-existing contracts with Algeria keep this country as the second supplier in 2022, with 56,062 GWh, channeled, mostly, through a gas pipeline.

Following this are Nigeria, with 31,473 GWh, almost 50% more than in the first half of the previous year, and Russia, with 24,016 GWh, 12.2% more, in the middle of the critical scenario outlined in Europe as a result of the invasion of Ukraine.

Where do we export?
Natural gas exports also grew in June, by 6.1%, to 4,087 GWh, of which 80.7% was by gas pipeline and the remaining 19.3%, as LNG.

Once again, France was the main destination for exports, with 3,181 GWh, 77.8% of the total, and for the first time gas was brought to Morocco, 60 GWh.

In the annual accumulated, natural gas exports reach 29,996 GWh, after increasing by 99.3%.

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