Analysis Energy
Oil falls, electricity remains at the price
A dichotomy is emerging in the energy market. Electricity remains quite expensive, despite the large supply of solar energy. Oil has actually fallen in price. Have oil traders been overly optimistic about economic recovery or is it just a temporary correction?
The oil price seems to have passed its provisional high. Positive economic expectations and production restrictions from OPEC+ have pushed up the oil price in recent weeks. On Tuesday, June 15, a barrel of Brent crude was trading at $74,25. That dropped to $18 a barrel today (Friday, June 72,40).
Correction or trend break?
Opinions vary quite a bit as to whether there is a pause in an up market or whether it is on the way down. Some analysts argue that the current dip is caused by speculators who are now taking their profits, but that the underlying factors (especially economic growth) have not changed.
Others think the trend is broader and look to prices of other commodities such as metals and grains, which have also been falling for a few days. They fear negative effects of the policy of the US umbrella organization of central banks, the Fed. Yesterday (Thurs 17 June) the Fed announced that it will raise interest rates by 2023 steps of 2% before the end of 0,25. Earlier, the Fed did not expect to raise interest rates before 2024.
The correction in the oil price is still not very noticeable in fuel prices. The diesel price reached its highest price in almost a year and a half this week. Last week diesel cost €105,96 per 100 liters. That increased this week to €107,06 per 100 liters yesterday (Thurs 17 June). Today the price has dropped slightly to €106,70 per 100 litres.
Electricity remains expensive
Electricity remains very expensive. On Wednesday, June 16, the EPEX spot quotation peaked at €87,62 per MWh, the highest level for more than 3 years. Even during the sun-drenched afternoon hours, the hourly price on the spot market remains around €60 per MWh. Only on Sundays there was a price dip due to less demand. But at €48,93 per MWh, the dip is less than in recent weeks.
The limited supply of wind energy and maintenance work on power stations ensure a limited supply of electricity. Analysts expect little to change this in the coming week. For the coming week, the electricity price will remain the same as this week.
Coastal protection and energy storage
Working on dyke reinforcement and at the same time creating a possibility for energy storage. It is possible according to Delta21. The organization has worked out a plan for a flood defense under Maasvlakte 20 at the mouth of the Haringvliet. The waterworks create an artificial lake of approximately 2 kmXNUMX in the sea, as it were. River water is discharged using a pumping station, so that discharges can still be made in a situation with high sea and river levels. Raising the river dykes - which is necessary because of the expected rise in the sea water level - can therefore be dispensed with.
A side effect of this solution is the storage of (electrical) energy. In hours with a large supply of electricity, the pumps are turned on and the electricity is stored in the form of water. When the demand for electricity picks up again, the water can be drained and converted back into electricity via turbines.
In total, approximately 1,8 GW of energy can be stored in this way for a period of up to 12 hours. According to the initiators, the lake can thus make a substantial contribution to the challenges of the energy transition. During hours of oversupply, available generation capacity is prevented from having to be shut down.
Jurphaas Lugtenburg
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