The gas price remains quite rigid at the moment and barely responds to both cold and the geopolitical events in the Red Sea. In the meantime, the electricity price responds to colder weather, due to greater demand for exports.
The gas price is quite stable at the moment. On Tuesday, January 9, the TTF stood at €30,64. The price then rose in fits and starts to €31,99 on Friday, January 12, before falling again. On Monday, January 15, the gas price opened at the lowest level since May 30, at €30,30.
The gas price is barely moving at the moment. That is remarkable, since it was quite cold in Europe last week. On average, this resulted in gas demand 5% above average at this time of year. However, well-stocked gas reserves ensure that the gas price does not go out of control. The reserves are currently still 75% full. In addition to the well-stocked reserves, low Asian spot prices for LNG also ensure low gas prices. Currently, LNG in the Asian market is priced at $10,10 per mmBtu. That is significantly lower than at the end of 2023 when more than $15 was charged.
New developments in the Red Sea also have no clear effect on the gas market. This weekend, four Qatari LNG ships came to a standstill in the Red Sea, due to attacks on several ships over the last two months. The announcement that Qatar will no longer ship gas through the Red Sea due to the attacks by Houthi rebels is also not gaining traction on the market. Ships have been sailing around the Cape of Good Hope since Monday January 15. That costs about 10 days and €1 million extra per flight. The additional costs not only entail the risk of more expensive gas, but also the risk that LNG on the spot market will be exported to Asia sooner, as the additional costs for the European market will be significantly higher. The fact that the market is not reacting to the events indicates confidence that the gas reserves are more than sufficiently filled to get through the rest of the year.
Electricity price reacts more strongly
The electricity price is at the highest point since early December. On Tuesday, January 9, electricity traded for €96,88 per megawatt hour. Until Thursday January 11, the electricity price increased to €107,86. The price dropped until the weekend. On Sunday, January 14, the price dropped to €80. Monday January 15 opened the week at a relatively low level of €84,53.
The weather is a dominant factor in the higher electricity demand. The low temperatures in particular are an important factor during this period. An important reason for the higher electricity price is that the Netherlands produced significant extra electricity for export. This export is mainly the result of the cold in Scandinavia, where temperatures were regularly below 15 degrees Celsius. It should come as no surprise that there was a lot of demand from Scandinavia. In those countries, heating is predominantly electrical.
In addition, the cold weather was at the expense of renewable energy production. On cold days the wind force generally decreases and that is slightly different now. In total, the share of wind energy in the Dutch power mix fell by about 15 percentage points to 31,4%. On the other hand, it was noticeable that it rained less often. As a result, 6% of solar power compensated part of the loss of power from wind turbines. In total, the percentage of virtually free electricity was 37,4%. A decrease of 11,2% compared to last week.