Europe's natural gas ticking time bomb has exploded. Again.

Hopefully I'm wrong. Probably I am not.

20 years ago, natural gas looked like the dream. Europe embarked on natural gas and LNG. 10 years ago, plans came to fruition and natural gas was heavily deployed on mass, and Russia was happily locking us up to its immense supplies, while we looked away at its corruption. Today, natural gas is 21 percent of energy supplies for Europe, and in particular, it is 15.9 percent of electricity generation. However, very concretely, gas prices still set the price of electricity 50% of the time (see the merit order mechanism). Many Belgians people who were locked to flexible prices still remember their bills of 2022, where the prices skyrocketed because they were hooked to natural gas prices.

In 2026, renewables have progressed faster than expected, which is amazing news, but gas is still the peak price setter, especially in winter.

And that's the time bomb.

It is here, it is hiding in plain sight.

Natural gas is 20% of Europe energy supplies

After 2023, Europe supplies switched to the US and a few other suppliers.

Earlier this year, those suppliers were attacked.

So the US decided to (not) help us by selling natural gas and LNG in particular at a higher price. Funny thing, it happened just when they are investing in even more terminals.

Natural gas prices for Europe in June have already gone up, and it is the season where we should be using the least amount of it.

Natural gas prices are up in the summer

Tell-tale signal that something is happening: we started buying Russian gas and oil again.

So, brace for impact. Fasten your seatbelt. Sign fixed-price contracts while they are open. Get solar panels soon, learn to drive slower (you'll learn to enjoy it).

I'm also in particular afraid that other factors compound to make the outlook worse:

Electrification of demand higher than expected (we use more electricity than expected)
AI datacenters eating the cheap energy away
Food prices due for a high inflation (agricultural chemical products, up by > 100%).
grid operators having to renew the infrastructure pass on the costs to their customers.
US, Israel, and Iran can still do much more damage.
there is probably a shortage of uranium too, which is the other most used energy for electricity in Europe

I believe Europe is otherwise on the verge of incredible prosperity and has the resources to make it happen, but the commitment to hard choices is lacking. We didn't invest enough in more clean energy, so we pay the price. We didn't protect our industry from transfers to China, so we pay the price. We always pay the price, one way or another. So let's stick to the right decisions, and let's make sure our elected representatives take the right decisions. Paper straws won't get us through this winter. So it's up to us to take care of our energy supplies.

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Europe's natural gas ticking time bomb has exploded. Again.

Alain SANGUINETTI