Antipodes Partners: Why we are increasing exposure to natural gas

Gas storage 25% lower

The European winter is upon us and there are real fears there will not be enough gas to meet demand, with current gas storage 25% below historic levels for this time of year.

To understand what is happening right now in Europe you must consider the block's key energy policies.  Europe derives about 25% of its annual electricity supply from burning imported gas and coal. These two fuels perform a mission-critical load balancing service, firing up during periods of high demand, which typically occurs during the cold winter. So, being able to secure enough coal and gas for the winter is crucial for security of supply. This is where European energy policy is surprisingly vulnerable.  An unfortunate consequence of Europe's deregulated market design is that powe...