When a thaw helps to win an (economic) war

How important was the weather factor in the resolution of the energy crisis of 2022-2023?

Half a year ago Europeans were bracing themselves for a winter of discontent, cold, and darkness amidst dwindling gas supplies and sky-high gas prices. None of this really happened and Europe has emerged from winter absolutely unscathed with many emergency measures that were planned for in the Fall of 2022 never employed. Why was it? Did Europe find an abundant alternative to Russian gas, where it alternative energy sources that supplanted combustible fuels, did all the energy-hungry plants and factories shut down, or maybe Europeans turned their thermostats to single-digit temperatures? According to International Energy Agency, 2022 vs 2021 reduction was 55 bcm or 13% of the total. All the factors, I’ve mentioned, did influence the lucky outcome to some extent, but the major and most decisive factor was the weather.

It begs to ask, to what extent, indeed, gas consumption is weather-dependent and was the past winter really extremely warm? Somewhat silly questions, but sometimes it is interesting to quantitively evaluate qualitative conventional wisdom.

I have picked Germany, which is a large country, sitting in the very middle of Europe as a good representative of the general trend. Germany comprises 22% of European gas demand and it reduced its capacity in 2022 by 15% compared to All-European reduction of 13%, so I believe, it’s a good representative.

I have used two data sources, monthly gas consumption data from Eurostat and temperature data from Deutsche Wetter Dienst (German Weather Service).

I have used HDD, heating degree-days as the weather metric. DWD uses 20 degree as a threshold measure, so if in a given 30-days month the weather would stay at 15C, we would have a 30*(20-15)=150 HDD month. If it would be 10 degrees for the first 15 days and 5 degrees in the second half of the month, it would be 15*(20-10)+15*(20-5)=375 HDD month. The idea behind the measure is that gas is used to bring the temperature from the ambient 15 or 10 or 5 degrees to a comfortable room temperature of 20 degrees. Various countries use different cut-off temperatures, but it does not really matter.

German Weather Service has a myriad of weather stations, I’ve picked only those that had observations for every month in the examined period and summed HDD from all of them for every month, which gave me a nice integral measure of heating demand in Germany as a whole. Summer is not an interesting period for our purposes, so I’ve looked at heating seasons from October to March every year. Here are the results:

During the heating season of October 2022-March 2023 heating demand, expressed in All-German HDD figure, was at the very bottom of the range in all months except December.

For the season as a whole, 2022-2023 was also the warmest winter in the last 10+ years (please note, that the bottom of the chart is truncated).

But did it really matter? How strong an influence does heating demand have on gas demand?

Eurostat provides gas consumption figures in billions of cubic meters per month (bcm), and I already had the temperature data, so here comes the correlation chart on the data from 2014 to 2023, linking the two.

German gas consumption has varied from 3 bcm per month in August of 2022 to 13.4 bcm in January of 2017. Fair enough, Aug’22 was the month of sky-high gas prices, but 3.6 bcm demand was, for example, registered in worry-free June’19.

Obviously, the link is extremely strong.
And I think, this is a case where numbers and charts are eloquent enough, so I’ll spare you from the moral.