The electricity market continues to take steps upwards. Last week even the record price of early March came into view. The upward momentum in the market is partly caused by the problems with the supply of gas from Russia. To cope with these problems, an old trusted fuel that had fallen out of favor due to the environment is used again.
Electricity prices have risen sharply in recent days. On Thursday, the quotation on the EPEX Spot rose to €425,46 per MWh. This brings the price close to the highest price ever set at the beginning of March at €443,32 per MWh. On Sunday, July 31, the EPEX quote fell to its lowest point in the past seven days, closing at €316,87 per MWh. That is already a high price for a weekday, let alone for the weekend. The rally in the electricity price does not seem to be over yet. Yesterday the quote closed again above €400 per MWh at €404,33 per MWh.
On Sunday, the supply of solar energy was disappointing, which largely caused the relatively high price for electricity on Sunday. It is also striking that the price of electricity is also quite in line with the wind power. At the beginning of last week there was still quite a bit of wind and with that also the supply of power generated by wind turbines. This clearly had a depressing effect on the electricity price. Towards the end of the week and this weekend the wind died down and the electricity price rose.
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Due to the problems on the European gas market, coal is being used again where possible. While the coal-fired power stations had to be closed even faster, various countries are now deciding to stretch the environmental permits a bit to generate more electricity with the coal-fired power stations. This in turn has an effect on the international demand for coal. The International Energy Agency (IEA) announced in its coal market update on Thursday, July 28, that it expects demand for coal this year to match the record demand set in 2013. Next year, the use of coal will be even slightly higher, according to the IEA.
In the EU, coal consumption increased by 2022% in the first half of 10. For the whole of 2022, the IEA expects coal consumption to increase by 7% compared to last year to 476 million tons. This is mainly because the existing power stations remain open longer than planned. China is also the largest market for coal. China accounts for about half of the total world demand. The other big player follows at some distance and is India. Together, China and India burn twice the amount of coal that the rest of the world consumes.
The CO2 emissions caused by coal-fired power stations in the EU must, however, be covered with emission rights. Spanish Prime Minister Sanchez announced in a press conference last Friday that he would make a proposal to Brussels to introduce a maximum price for emission rights. According to Sanchez, this is necessary to curb the high inflation. At the time, the emission allowance system was specifically set up to allow the allowances to rise in price over time, thereby creating a financial incentive for companies to become more sustainable.