Prices on the energy markets fell significantly last week. The gas price fell by almost 10%. That brought the electricity price down considerably, although the large production of solar panels also helped at times when demand peaks.
The price of gas has fallen further. On Tuesday, February 16, gas traded in Europe for €29,92 per megawatt hour. Afterwards, the gas price fell by 9,5% to €27,12.
This means that the price of gas has reached its lowest level in six months. This should not come as a complete surprise, because gas prices already fell during the cold weather at the beginning of January. Two weeks ago the temperature was below zero during the day and last week it still froze regularly, but according to experts we are heading for an exceptionally mild period. The weather is now a lot milder and temperatures in most of Northern Europe remain above 0 degrees. According to the KNMI, the maximum temperatures next week will be almost constantly around 10 degrees.
An even more important factor is low industrial demand. Since the war in Ukraine, demand has fallen sharply, but production continues to decline due to the weaker economy. In November, industrial activities fell by 0,3%. Over the entire year, industrial activity declined by as much as 5,8%. This is partly because companies are ceasing their activities in Europe as a whole. The number of companies that cease operations due to high energy costs is still growing. On Monday 15 January, Nyrstar halted its zinc production in Budel due to high energy costs. The company uses approximately 1% of Dutch electricity.
As a result of lower industrial activity, filling rates are still at record levels. According to the latest interim figures, gas reserves in the European Union were 75% full. The crucial German gas reserves had a filling rate of 78,2%. Due to the high filling rates in both Europe and Asia, the Asian LNG price has now fallen below $10. The price is now $9,50 per mmBtu, a decrease of 6% compared to last week.
Storm depresses electricity prices
On Wednesday, January 17, the electricity price was at its highest point of the week. That day, the EPEX traded at €97,71. Until Sunday, January 21, the price fell to €56,46. The price then rose slightly again. On Monday, January 22, the EPEX was trading at €62,75.
The drop in electricity prices is partly due to the lower gas price. Gas was needed to generate 37,7% of the electricity. In addition, the effects of renewable energy are clearly visible again. The low quotation of the EPEX on Monday, January 22 is related to the large production of wind energy in connection with storm Isha. The expectation is that strong production will continue for the rest of the week. Next week the wind force will mainly be between 4 and 6, with two days with wind force 3.
This is in contrast to last week's production. In week 3, 29,9% of the energy was supplied by wind turbines. A lot less than previous weeks. However, this is offset by an almost twice as high production of solar panels. In total, 6,2% of the electricity demand was met by solar panels. Together, the percentage of more or less free energy amounts to 36,1%. The drop in the electricity price over the week is the result of a slight increase in the productivity of wind turbines in combination with significant peaks in solar energy production at the time of peak demand.