Electricity prices plummeted last week. The Pentecost weekend draws the contours of the EPEX. Not only was demand lower during this period, but the supply of free electricity was also high due to the sunny weather. In addition, the Netherlands received strong criticism from the European Commission last week about the greening of the energy mix.
The electricity price was quite low last week. On Monday, May 23, the Epex was trading at €62,92. A day later (Tuesday, May 24), the electricity price rose to the highest point of the week, at €95,04. Over the weekend, the price of electricity fell to the lowest price of the week. On Sunday, May 28 (Whit Monday), the electricity price was only €5,33. On Tuesday, May 30, the electricity price was considerably higher, at €84,42.
The Pentecost weekend had a clear impact on the electricity price. Both the demand and supply sides of the market helped drive down the electricity price. Due to the long weekend, demand from companies was lower until Monday, May 29. Although the largest drop in demand occurred between Saturday and Monday, there was already a lower need for electricity in the days before. Many people take extra days off in the days before Pentecost.
On the supply side of the market, a large number of hours of sunshine led to a lower price. Solar collectors managed to meet no less than 35,3% of the Dutch electricity demand. Because the production of wind turbines was also not disappointing, a total of 64% of all electricity was generated from renewable sources. Due to the large renewable electricity production, only 35,9% was generated by gas-fired power stations. Although a considerable part is not even due to Dutch customs. Almost a third of the electricity from gas-fired power stations was intended for export.
Brussels reprimands the Netherlands
Especially with last week's high production, it appears that the energy transition is in full swing. However, if it is up to the EU, things are not happening nearly fast enough. In its annual recommendation, the European Commission criticized the Netherlands several times. Although it is growing rapidly in the field of solar and wind energy, the Netherlands is still among the weakest performing countries in terms of a sustainable energy mix, according to the EU. Only 13% of the total energy mix is green. On average, EU countries use 22% of green resources. This does not only include electricity. For example, the consumption of diesel for transport is also included in this figure.
Herein lies the crux. Although the Netherlands is slowly but surely catching up with the rest of the EU in terms of the electricity mix, only 20% of the Dutch energy mix consists of electricity. Approximately 25% of Dutch energy consumption consists of transport and no less than 55% of all energy is classified as heat. This does not only mean the heating of buildings. Industrial heat, such as the production of tata steel, also falls within this category. This balance is different in other countries. For example, electric heating has been the standard in many European countries for decades.
Energy support must be phased out
The European Union also had some objections. In the field of insulation, the Netherlands is still far from meeting European requirements. In addition, a major renovation of the electricity network is not getting off the ground due to administrative problems. The so-called grid scarcity is one of the biggest challenges in the energy transition. In order to be able to move the planned capacity of solar and wind energy, the capacity of the Dutch power cables must be significantly increased. The European Commission advises the Netherlands to invest heavily in insulation and the power grid.
In addition, Brussels has addressed all member states for their energy compensation. According to the committee, the measures are too expensive and untargeted. That is why the commission announced that member states must stop compensation measures before the end of 2023.