The electricity price has taken a significant step downwards. This can partly be attributed to the large production of wind energy around storm Ciarán. Over the entire week, lower gas prices in particular led to a lower Epex reading.
The price of electricity has fallen considerably this week. Only on Tuesday, October 31, did the price exceed €100. That day, the Epex recorded €117,98 per megawatt hour. Then the price dropped sharply. On Friday, November 4, energy companies paid only €29,51 per megawatt hour. Quotes below €30 only occurred nine times in 2023.
The low prices on Thursday and Friday are the direct result of the large production of wind energy around storm Ciarán. Especially on Friday, a lot of electricity was generated by wind turbines. But a fair amount of wind energy was also produced on Thursday. The rest of the week was somewhat calmer, meaning that on average 43,8% of electricity was generated from renewable sources. With 7,7% of solar energy, more than half of all electricity was generated virtually free.
Lower gas price
In addition, the Epex is depressed by lower gas prices. Until November 3, the gas price was around €50. Around November 6, the price dropped to around €45. Just like last year, the high temperatures are having an impact on gas demand. In the summer, about 16% less gas was consumed compared to the summer before the war in Ukraine. This is now about 33% less.
Even if the weather forecast comes true and it remains warmer than average for a while, the filling season is now almost over. 99,7% of the Dutch gas reserve has now been filled. Given the low temperatures, a filling level of 100% seems feasible. This could result in lower gas demand in the short term.
The fear that the conflict between Israel and Hamas will cause disruptions is also fading somewhat. Although there appears to be some pressure on Egypt's gas market, the effects on Qatar's LNG exports are minimal. In addition, analysts do not estimate the chances of escalation to be too high. An example of this is a recently published analysis by consultancy firm Eurasia Group. The agency estimates the chance that the war will be limited at 70%.
Coal unprofitable
Due to the lower gas price, the utilization rate of coal-fired power stations has fallen again. This week, 5% of all electricity was generated by coal-fired power stations. Last week that share was still 13,3%. The pressure on the coal market does not seem to be able to make a difference in this regard. On Tuesday, October 31, €123,50 was charged for a ton of coal. On Monday, November 6, this had dropped to €119 and on Wednesday, November 1, the price was as high as €117,45. This brought the Newcaste Coal benchmark to its lowest level in 2,5 years. Even a falling CO2 price did not make the coal price competitive enough. On November 2, the CO6 price reached its lowest level since November 2022, at €79,61.