Now that the Israeli offensive in Rafah appears to have begun, the price of gas has taken a significant step upwards. In the meantime, the price of electricity is rising, because solar panels are slowly but surely taking over from wind turbines again.
The gas price has risen slightly this week. On Tuesday, April 30, gas traded for €29,39 per megawatt hour. The next day the price dropped slightly to €28,86. Since then the price has steadily increased slightly. See you Monday May 6. On that day, the gas price rose sharply and the TTF price closed at €31,80 per megawatt hour.
Until Monday, the gas price was fairly stable. The weather is expected to be good for the next two weeks. Temperatures rise to normal levels for the season, but in the meantime a lot of wind is expected. The market's expectation is that gas demand for heating is virtually nil. As a result, it is likely that gas reserves will increase in the coming weeks. The filling level is currently 62,3%.
What also ensures stability is that the supply from Norway continues to increase. Bloomberg reports that supply from the country has increased by 5% compared to the first quarter of 2023. Revenues fell sharply due to the lower gas price. As a result, Norwegian gas revenues from the European Union roughly halved in the first quarter.
Rafah raid causes peak
In recent weeks, hopes for a ceasefire in Israel have brought more stability to the market. A ceasefire would reduce risks for LNG transport around the Black Sea region. However, last night (May 6), that hope came to an end. Hamas announced that it had agreed to a ceasefire proposal from mediators Egypt and Qatar, but the Israeli war cabinet unanimously decided not to agree to the proposal. According to Prime Minister Benjamin Netanyahu, the proposal does not meet Israeli requirements. Meanwhile, Israel has launched airstrikes on Rafah after the army ordered 100.000 Palestinians to leave the area.
Electricity
The price of electricity was considerably higher this week. On Wednesday, May 1, the electricity price was at the lowest point of the week at €26,01. Since then the price has fluctuated at a relatively high level. Over the weekend the price did not drop below €60 and on Monday, May 6, the electricity price reached the highest point of the week, at €93,79.
The higher electricity prices are directly related to the growing dominance of solar power compared to wind. That transition is typical for this time of year. The days are getting longer, while the wind strength is decreasing. In total, 64,8% of the electricity was generated virtually free. The total share of solar energy is 36,5% compared to 28,3% of wind turbines.
The change makes generating energy from renewable sources more unpredictable. In periods with a lot of wind, the wind generally blows all day, while the sun only shines for part of the day. This results in hours with very low to negative prices and hours with high prices. As a result, daily electricity prices are generally higher.
250 million for green hydrogen
Moreover, the government has taken another step to compensate for this shortcoming of renewable sources. The Dutch government has promised €250 million in subsidies for green hydrogen. This means investing in seven companies. Electrolysers must be used to absorb the overcapacity of solar panels and prevent shutdowns. The total electrolysis capacity of these projects will be 2028 megawatts by 101, of which 91 megawatts will come from projects in Groningen.