Consumption of natural gas in the EU’s third-largest economy, Italy, dropped by 2.5% in 2024 to its lowest level in more than 15 years, power market manager GME said on Friday.
Demand fell for a third consecutive year in 2024, due to higher prices compared to the pre-energy crisis levels, the market manager said in a monthly newsletter.
Gas consumption in power generation fell by 1.6% last year from a year earlier, while residential consumption and the industry saw slight increases in consumption, up by 1.8% and 1.3%, respectively.
As a result of lower demand, Italy’s natural gas imports fell to the lowest level since 2015, with reduced imports both via pipeline and LNG, according to the data.
Europe remains vulnerable to possible shocks in natural gas supply as its exposure to LNG trading and supply has grown, Stefano Venier, CEO of one of Europe’s biggest gas grid operators, Italy’s Snam, said at the end of last year.
Early this year, Italy called for a much lower EU cap on natural gas prices.
The EU needs to extend the cap on natural gas prices but set the cap at a much lower level, to avoid fresh shocks in energy bills, Italian Energy Security Minister Gilberto Pichetto Fratin told a local radio station in early January.
The European Union set at the start of 2023 an emergency cap on natural gas prices. This cap expires at the end of January 2025.
The cap on gas prices, the so-called “market correction mechanism,” will be triggered if the month-ahead price on the Title Transfer Facility (TTF), Europe’s key benchmark, exceeds $185 (180 euros) per MWh for three working days, and the month-ahead TTF price is $36 (35 euros) higher than a reference price for LNG on global markets for the same three working days.
According to the Italian minister, the cap on natural gas prices needs to be lowered to $51-$62 (50-60 euros) per MWh.