While the gas price remained stable, the price of electricity was on the low side this week. The gas price remains in the grip of large gas reserves on the one hand and a high LNG price at the same time. Meanwhile, the electricity price is being pushed down by significant solar energy production.
The gas price remains quite stable again this week. The TTF was at its highest point of the week on Tuesday, June 25. The price for a megawatt hour that day was €35,18. A day later the price fell sharply, to €34,14. The price gradually recovered. On Monday, July 1, the gas price was €34,84.
The price of gas has been fairly constant since Tuesday, May 22. The price of gas has been consistently between €33 and €36,25 over the past month and a half. Since June 10, the price has even been between €34,50 and €35,75. The stability is the result of a precarious balance between full gas reserves and weak supply. The gas reserves are currently 77% full. That is a lot fuller than usual. However, filling is still slow. Last week the filling rate was 74%. Although the pace seems to be increasing slightly. In recent weeks, the filling rate increased by 2 percentage points. This week, reserves rose by 3 percentage points.
High LNG price
The high demand for LNG in Asia in particular remains a thorn in Europe's side. The leading Asian LNG price is down slightly from Tuesday, May 25's high of $12,74 per mmbtu. On Friday, June 28, the price fell to $12,64, bringing the LNG price back to around mid-July levels.
The main reason prices remain high is the high temperature in the Northern Hemisphere. It is particularly warm in Asia and the demand for power for air conditioning still causes high LNG prices. This ensures that even American LNG on the spot market mainly has Asia as its destination. Overall, the United States has exported at least half of its LNG to Europe since the war in Ukraine. As long as temperatures on the Asian market remain high, a drop in the LNG price is unlikely and a drop in the European gas price also seems unlikely.
Electricity price favorable, but stable
Meanwhile, the price of electricity was on the low side and quite stable. On Monday, July 1, the electricity price reached its highest point of the week, at $88,83 per megawatt hour. Before that, the price was at a high on Thursday, June 27, at a level of only €74,54. The price reached its lowest point on Sunday, June 30. On that day the price per megawatt hour was €45,75.
In fact, only one factor was relevant on the electricity market and that was the generation of solar energy. In total, only 53% of the solar energy was generated by solar collectors. Add 12,4% wind energy and you get a total of 65,4% of this renewable energy. Due to the significant generation of solar energy, only 23,1% of all electricity was generated by gas.
When the gas power stations were switched on, you immediately saw the price rise this week. For example, the electricity price did not fall to just above €30 on Sunday, June 0, as we often saw in recent weeks on sunny days, as the amount of solar energy was slightly lower that day. That day the level only fell to just above €45. The production peak that day was 17,72 gigawatts. On several weekdays the peaks rose above 20 gigawatts, with a peak of 24 gigawatts on Friday, June 28.
Higher prices
Despite the increase in the percentage of renewable energy, the electricity price rose slightly in June compared to the previous month. The average price was €68 per megawatt hour. In May the average price was €66. The price increase is due to the higher gas price. The higher production from renewable sources was not able to compensate for that increase.