Prices on the energy markets have moderated somewhat in recent weeks. In Europe, the high filling rate has moderated the increases in recent weeks. In addition, the electricity price was low due to favorable conditions for generation from renewable sources.
The gas price has taken another step down compared to last week. On Monday, August 19, gas was still trading for €39,85 per megawatt hour. However, on Monday, August 26, the price had fallen to €36,42.
The gas price was unable to maintain its level of around €40. This is mainly the result of the high filling rate, which tempers the upward price pressure from lower Russian supplies. The reserves are currently 91,2% full. Historically, the filling rate at this time of year averages around 80,2%. However, the potential for a further decline is not great. Supply to Europe remains on the low side, which means that the risks of long-term shortages remain. This ensures that there has been no significant decline so far.
LNG remains expensive
In addition, a high LNG price keeps the TTF at the same level. On Friday, August 23, Japan and South Korea's world-leading LNG quote stood at $13,82 per mmBtu. That is significantly lower than the August 19 high of €14,66 mmBtu, but still significantly higher than the rest of the summer's level of between $12 and $12,50.
Asia has been dealing with hot weather all summer and that is still the case. As a result, the continent's LNG imports rose to a seven-month high in August, reaching 25,03 million tonnes. China in particular is importing more. In August, imports increased by more than 1 million tons from 5,91 million tons to 6,94 million tons, according to data from maritime data agency Kpler. Analysts attribute the higher consumption to greater demand for freight transport.
Gas price hardly plays a role in the electricity market
The electricity price has also taken a clear step downwards this week. On Tuesday, August 20, electricity traded for €84,25. After that the price was consistently lower. Between Thursday, August 22 and Sunday, August 25, the price remained below €50, with a low on the latter day. At that time the price dropped to €20,78. On Monday, August 26, the gas price was €83,01.
The electricity price was therefore considerably lower than last week, when the price of electricity exceeded €100 no less than three times during the week. The lower gas price was only of limited importance. Due to very favorable weather for generation from renewable sources, the gas price was hardly a factor. In total, only 16,3% of all energy was generated by gas turbines.
In total, solar and wind accounted for 67,3% of the entire electricity demand. It is remarkable that more wind energy was generated last week than solar energy. In total, 34,7% of the energy was generated by wind turbines, compared to 32,6% solar energy. This ensured that the electricity price was constantly depressed, as high wind power is distributed relatively evenly over the day. Add to this many hours of sunshine during office hours on the main production days and you have the recipe for a relatively favorable electricity price.