In this analysis we evaluate the effect of removing the Russian long-term contracted gas volumes from the Austrian market. The study investigated (i) the effects of OMV gas contract stop from 2025 January, (ii) a potential full Ukrainian transit stop, and (iii) a full Russian pipeline supply cut to EU27. Expected stop of deliveries for each scenario are modelled for 2024, 2025, 2027 and 2030. Unexpected stop of deliveries was modelled for 2024.

The EGMM model was calibrated to 2023 April-2024 March historical data (demand, EU27 supply structure and prices) and assumptions were fully aligned on future capacity and demand figures with Austrian experts. Modelling suggests that the Austrian and the interconnected European gas system is resilient to the Russian gas supply shocks. None of the modelled scenarios result in price shocks similar or close to what was witnessed in Europe during the gas crisis in 2022 (e.g. the 300 EUR/MWh price spike in August 2022). Although Russian gas has still a sizeable share in CEE gas supply mix, the improved interconnectedness of the European gas networks, the access to alternative supply sources and the storage regulation that prepares for the winter with a 90% stock level in November does ensure that the market can react to any changes of Russian gas supply.

The scenarios investigating the expected or unexpected stop of the OMV contract (No AT contract) with Gazprom by January 2025 show that the market already prepared for the termination of the contract before its original expiry date (that was 2040). We do not see dramatic price increase for the NO AT contract scenario (not even for the unexpected). The impact is rather limited in geographical scope: it mainly triggers small price increase (0.05-2.06 EUR/MWh) compared to a case when we assume that the contract and the UA transit route remains in place. The largest impacts are measured in Austria sometimes with some spillover effect in Slovenia and Slovakia. The most severe impacts under normal scenarios are to be expected in gas year 2025. Additional infrastructure coming online in later years (e.g. WAG) and more LNG supply by 2027 and 2030 alleviates the effects of shocks, however the assumed increase in Austrian gas demand (from 75 TWh in 2024 to 80 TWh form 2025 onwards) does not allow prices to return fully to the 2024 levels.Therefore, we stress the importance of demand side measures to keep the gas demand low.

Besides gas market modelling, the EPMM electricity market model provided inputs on the future of electricity prices for Austria and the EU28 for WIFO modelling on the overarching effects for the Austrian economy. The study encompassing the overall results is available at the website of the Ministry of Climate Action, Environment, Energy, Mobility, Innovation and Technology (BMK).