The electricity price was stable this week, but relatively high. The main reason for the increase is a higher gas price. At three large plants in Australia where LNG is produced, staff are threatening a strike. This seems to have triggered an increase in the price of liquid gas.
The electricity price remained above average stable this week. All week long the price of a megawatt hour of electricity was between €60 and €90 per megawatt hour. In addition, the electricity price resumed its normal pattern this week. The price did not reach the lowest level of the week on Monday, but again 'normally' on Sunday, August 13. On that day the price of electricity was €63,91. On Monday, August 14, the price rose to its highest point, at €97,14.
The main cause of the higher electricity price is a significant increase in the gas price. On Wednesday, August 9, the gas price rose from €31,07 to €39,82, an increase of more than 28%. The strong volatility followed rumors of strikes at Australia's LNG terminals. Employees of Chevron and Woodside Energy Group planned to block exports from LNG terminals. The fact that this increase has such a major effect on the European market comes as something of a surprise to analysts. Australia hardly sells LNG to the European market, but mainly supplies to China and Japan.
The consequences are therefore mainly indirect. There are fears that lower Australian supply will push up Asian LNG prices. This creates the risk that boats will detour to the Asian market, leaving the European market behind the net. Tentative signs of such a move already appear to be visible. Since August 11, the Asian LNG price rose 5,5% to $11,50 mmBtu. The fact that the consequences are indirect does not make the consequences any less serious. Together, the Australian facilities are responsible for 10% of the international LNG supply. The gas price has now fallen to around €35. When it turned out that the strike threat was not as acute as initially thought, the worst panic disappeared from the market.
Effect of renewable electricity limited
The fact that the increase only has a limited impact on the electricity price is due to the low gas consumption. Last week, only 20,3% of all electricity was generated by gas-fired power stations. This is partly the result of lower electricity demand. Because many Dutch people are currently on holiday, demand from both consumers and companies is lower. In addition, greater productivity from renewable sources reduces dependence on fossil fuels. About 68% of all electricity was generated renewablely. No less than 59,9% of this came from solar and wind energy.