Analysis Energy
Oil and electricity prices are on the rise
Energy prices were on the rise last week. In the electricity market, this increase was mainly caused by a limited supply, in the case of oil by the increased demand. Economists at the Harvard Business Review warn that a solution must be found quickly for old solar panels. The economic life of the panels can turn out to be much shorter than expected.
Contrary to expectations, electricity prices were on the rise. Revenues from solar and wind energy in the Netherlands and neighboring countries were lower than expected. This coincided with a peak in the gas price, causing the costs of gas-fired power stations to be higher. In addition, a number of power stations in the Netherlands are out of service due to maintenance. On Wednesday and Thursday 23 and 24 June, the electricity price on the EPEX Spot listing even exceeded €90 per MWh.
Tightness continues
A fall in the electricity price is not expected for next week . It will remain relatively windless and the necessary showers are expected. An additional supply of solar and wind energy is therefore an obvious choice. Maintenance work on some power stations will be completed next week, but power cables to Scandinavia will be out of service for maintenance.
The purchase of solar panels is promoted in various ways, for example by governments with tax measures. Reason for economists at the Harvard Business Review to take a closer look at the market for solar panels in the US for private individuals. They made a surprising discovery.
Technical and economic life
First of all, the researchers looked at the development of the solar panels. In the past 10 years, the energy efficiency of the panels has increased by 0,5% per year, while the price has fallen by tens of percent during that period. As a result, the initial costs per kWh for the end user have fallen sharply, with the government giving an extra boost through tax reductions. That only seems interesting for new installations. After all, according to most suppliers, the solar panels have a technical lifespan of approximately 30 years.
Due to wear and tear, the efficiency of the already installed solar panels decreases by approximately 1% per year, while new panels generate more and more power per m2 if the trend of the past 10 years is continued. The economic turning point to replace the solar panels is therefore much shorter than the technical lifespan. The International Renewable Energy Agency (IRENA) expects that solar panels will be scrapped on a large scale well after 2030 and that this amount will gradually increase until 2050.
Model calculations by the Harvard Business Review for the private market in the US show that more solar panels may be discarded by 2035 than new ones will be installed. The business market is not included, but economists expect a similar or even stronger effect there. An investor is even more interested in yield. According to economists, good and affordable facilities for recycling solar panels must therefore be worked on very quickly. "The sunny outlook in 2021 could otherwise quickly turn under the thundercloud of a huge waste mountain."
Good demand for oil
The oil price has found its way up again. The dip and the oil price around mid-June are therefore not a break in the trend. On Monday, June 21, Brent crude was still at $74,93 a barrel. That rose to $76,10 a barrel on Friday. Demand for oil has risen sharply, especially in the US and China. US President Biden this week presented a plan to invest $579 billion in infrastructure over 5 years. This stimulates the economy and thus the demand for energy. At the same time, difficult negotiations over the nuclear deal with Iran are keeping Iranian oil off the market.
OPEC+ may still cause a turnaround in the oil market. Several participants argue in favor of increasing production quotas now that the oil price has risen so much in a year. Saudi Arabia's energy minister said that "we have a role in controlling inflation by not derailing the market". That could be an indication that OPEC countries are indeed going to pump more oil.
Diesel prices have also risen this week. Last Friday the diesel ended at €106,70 per 100 liters. That has steadily increased to €108,06 per 100 liters on Thursday 24 June. On Friday, that dropped slightly again to €107,84 per 100 litres.
Jurphaas Lugtenburg
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