Although the gas price appears to be virtually stable week after week, the price has clearly fallen over a longer period. Small decreases appear to add up over a long period of time. In addition, the electricity price was higher this week because wind power decreased.
The gas price went up and down a bit this week, but ultimately ended up at about the same point. On Wednesday, July 9, gas traded for €31,36 per megawatt hour. On Thursday, July 10, the price fell to the lowest point of the week, €30,78. Then the price rose. On Friday, July 12, the TTF reached its highest point of the week. That day the gas price was €31,72. On Monday, July 15, the gas price had fallen again to €31,23.
Week after week, the market appears to be roughly stable, but over a period of roughly two months, the gas price has slowly crept downward. On June 3, the gas price peaked at €36,15. With the current gas price of €31,23, the gas price has since fallen by 13,6%. One reason that the gas price is falling is that gas demand for generating electricity in Northern Europe has been on the low side since spring. Normally, the power from solar panels increases in the summer, while wind turbines generate less power. This summer, however, the power of wind turbines was higher than normal. In fact, most weeks the returns from both sources were virtually the same. Normally, the yields of wind turbines drop significantly in the summer, while solar panels generate more energy. This year, however, sun and strong wind go hand in hand. As a result, the gas demand for generating electricity was lower than in other years.
Filling level remains decisive
An even more important reason for the lower rating is the high filling rate of the gas reserves. Although filling is still somewhat slower than average, the reserves are much fuller than average. The reserves are currently 80,8% full. On average, the filling rate during this period of the year is only 66,2%. The full reserves have a dampening effect on any increases.
Yet the slow filling reveals that the market is still vulnerable. The fact that the reserves are filled so slowly means that the filling process can also come to a standstill. In addition, Europe may experience problems in the winter if the supply remains on the low side. If supply does not increase, more gas from reserves will be needed to meet demand.
It remains especially important to pay attention to the LNG market. A positive signal is that the large American LNG facility Freeport LNG is slowly but surely resuming operations. It is also favorable that the Asian LNG price appears to have passed its peak. On July 27, the Asian price of LNG reached its peak at $12,66. The price has now dropped to €12,33. In contrast to these bright spots, the French LNG port of Montoir will be out of operation until at least August 1 due to work.
Lower yields from renewable sources set the tone
After the low prices two weeks ago, the electricity price returned to its normal pattern this week. The price peaked in the middle of the week, on Thursday, July 11, at €90,28. The market reached its lowest point on Sunday, July 14. That day, electricity traded for €23,92 per megawatt hour.
The high electricity prices were the result of somewhat lower revenues from renewable sources. Two weeks ago, a particularly large amount of electricity was generated from renewable sources. In total, solar and wind met as much as 66,8% of the electricity demand, significantly reducing the price on several days. Due to strong returns from renewable sources, only 21,6% of all electricity was generated by gas-fired power stations. The high percentage of renewable energy was the result of strong wind power. As much as 34,9% of all electricity was generated by wind turbines.
This week, wind turbine yields fell to 28,4%. An increase in the share of solar panels from 31,9% to 33,6% proved insufficient to compensate for the lower yields. As a result, the share of gas-fired power stations increased to 26,5%. However, this is still a fairly high share from renewable sources and the contribution from gas-fired power stations is on the low side, especially since coal-fired power stations were out of service this week.
De Heus invests in wind
Animal feed manufacturer De Heus has announced that it has concluded a long-term electricity contract with Eneco. The company thus purchases electricity directly from the Ecowende offshore wind farm. De Heus indicates that from 2027, approximately one third of the energy the company uses must come from the wind farm. This step should help De Heus reduce its ecological footprint by 2030% by 42. If it is up to the company, this is a prelude to climate-neutral operations in 2050.