THE TRANSITION IS EASY ONCE YOU FORCE IT:

All European gas prices have tumbled since Vladimir Putin decided to stop supplying the continent through the Nord Stream 1 pipeline at the end of August. Day-ahead prices are similar to the hourly rate of €50/MWh, month-ahead prices for November are €100/MWh, less than a third of the peak, and future prices for November 2023 are also down from almost €300/MWh to around €140.

It goes without saying that the tumbling cost of gas was neither Putin's intention nor the consensus expectation when the Russian president weaponised European gas supplies during the summer. At the time, sector specialists expected wholesale prices to shoot higher and industry was worried. The voice of German industry, the BDI, warned of a "massive recession".

It was economists who came closest to understanding the likely effect of Putin's energy aggression; people and industries tend to respond to price incentives so they predicted that consumption was likely to fall.

Economic circumstances will still be difficult across Europe this winter, but that is exactly what has happened. The gas-hungry process of producing ammonia for fertiliser -- a low value added business -- ceased until a couple of days ago, with the bulk chemical imported from the US. Dirty coal and clean renewables have been used to substitute for gas in electricity generation. Analysis by Ember, a consultancy, has found that there was a record year-on-year increase in solar and wind electricity generation across the EU between March and September.

Most impressive of all has been the reduction in consumption of gas by both industrial and domestic consumers, not merely related to the mild weather. In recent weeks, Germany's industrial use of gas has been around 20 to 25 per cent down on a year ago while its production in the sector was 2.1 per cent higher in August year on year. German household gas consumption is down similar amounts as families compete to see how far into autumn they can go without turning on the heating.

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