A strong El Nino could bring early and lasting heat, challenging summer demand assumptions and exposing supply-side risks well beyond Southern Europe:
Prolonged heat could engulf much of Europe this summer, posing both demand-side and supply-side challenges to power markets:
The last El Nino event of this magnitude was in 2015, when Italian A/C penetration hovered around 7%. Today, it is approaching 50%. And a warming climate only adds fuel to the fire, as more recent summers have painfully shown.
Ultimately, this summer's demand shift could lead to significantly increased gas burn, which will compete with storage operators bidding to refill natural gas storage for the winter ahead, just as geopolitical risk continues to complicate the continent's long-term energy outlook. Read the full report for details.
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