Business Times: Europe 'faces serious energy supply challenge'

Europe faces a "serious" threat to its energy supply as a slump in gas demand could see almost 30 per cent of production capacity shut in the next two years, industry lobby group Cedigaz said on Monday.

European Union gas demand has fallen by a third in the past three years due to competition from cheaper coal imports from the US, increasing use of renewable energy sources and weak demand, the International Centre for Natural Gas Information said in a report.

The price of coal dropped 32 per cent between the middle of 2011 and the end of last year as it lost out to surging US shale-gas supplies. At the same time, rising oil prices dragged up the cost of gas by 42 per cent between 2010 and 2013.
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