Moscow’s “indefinite shutdown of Nord Stream 1”, Russia’s main gas connection to Germany, “was supposed to be the Kremlin’s big weapon that would send the wholesale price to new stratospheric levels”, say Ben Hall, Valentina Romei and Sam Fleming in the Financial Times. So far it hasn’t worked. Although they remain historically elevated, European wholesale gas and German electricity prices have instead fallen by 40% and 34% respectively since spiking late last month.
Russia’s share of EU gas imports has fallen from 40% to just 9% since the war began. With German storage tanks 88% full, “confidence is growing in…capitals that Europe can get through the winter without severe economic and social dislocation or energy rationing”.
The energy crisis is forcing a reform of Europe’s electricity market
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