Gas and electricity prices have risen slightly this week. Although the price of electricity was lower for the entire week than the week before. For a while, the gas price seemed to be moving again due to the chaos in the Red Sea. But a day later the situation turned out to be better again.
The gas price has risen slightly this week. On Tuesday, January 23, gas traded for €27,23 per megawatt hour. Then the price rose. On Wednesday, January 24, the TTF was at its highest point of the week, at €28,93. The price then fell sharply again to €27,78, before slowly rising again. On Monday January 29, the TTF rose to €28,60.
The increase on Wednesday, January 24, is attributed by market analysts to renewed interest in the risks surrounding the chaos in the Red Sea. The usual trade route between Qatar and Europe passes through the Suez Canal and the Red Sea. However, on Wednesday it was announced that Qatar Energy, among other things, will no longer sail through the Red Sea. Several analysts see this as a risk for the European supply. It could simply become too expensive to divert ships around the Cape of Good Hope.
However, things are not that far yet. However, the news soon followed that the supply is not yet affected by the chaos in the Red Sea. The Asian LNG price is simply still too low to compete with the European one. After this message, most of the increase was canceled out. In addition, analysts expect that the impact of any lower demand will only really be felt when European gas reserves are empty. Such a scenario is not yet in prospect. European gas reserves are still 73% full and the weather remains mild for the time being. Market analysts are now expressing the expectation that we will enter the spring with a filling rate of above 50%. This is well above the 10-year average of 35%.
Electricity prices remain favorable
The electricity price has risen compared to the low prices at the beginning of last week, but is still favorable for the time of year. On Tuesday, January 23, electricity was traded for €58,71 per megawatt hour. On Wednesday, January 24, the price fell slightly to €53,07. The highest quotation of the week followed a day later. On Thursday, January 25, electricity was trading for €83,78 per week.
Compared to last week, the overall price trend was somewhat more favorable. At the beginning of last week, the electricity price was significantly higher because relatively little wind and solar energy was generated. Most of the renewable electricity was generated at the end of the week. This week in particular, significantly more wind energy was generated. The percentage increased from 29,9% to 40,8%. The sunny weather and longer days also helped. In total, 6,7% of the electricity was generated by solar collectors. In addition, the distribution over the week was a lot more even, which meant that the price was almost continuously depressed.
The low gas price is also an important factor behind cheaper electricity. The price is now so low that the percentage of gas in our electricity mix has barely dropped. Two weeks ago, 37,7% of our electricity was generated by gas. Last week, this percentage fell by just two percentage points to 35,7%. On the other hand, the utilization of coal-fired power stations fell sharply. Two weeks ago, 11% of Dutch electricity was generated by coal-fired power stations. Last week this percentage was only 3,1%.
This is quite remarkable, since burning coal is now quite favorable from a price point of view. According to Newcastle Coal Futures, coal is currently trading at $116 per tonne, the lowest point since May 31, 2021. In addition, European CO2 prices are just above the lowest point since February 2022, at €65,28 per tonne. In mid-December, the CO2 price was still around €82,42. It therefore appears that the coal-fired power stations will only be switched on if the gas supplies threaten to become too empty, or if the gas price goes out of control.