The price of gas has dropped significantly this week. The main reason is that after a drop in temperature, it will be warmer in the coming days in Northwestern Europe. In addition, there was a large supply of gas from Norway.
The gas price has taken a clear step downwards. On Wednesday 11 September the gas price was at its highest point of the week, at a level of €36,14 per megawatt hour. On Monday 16 September the price had fallen again to €34,15.
The main reason for the lower gas price is the prediction that it will become somewhat warmer in the coming period. Last week it was somewhat colder with temperatures of around 10 degrees at night in the Netherlands, which caused the heating to be turned on here and there. However, it will become warmer again next week. The expectation is that the temperatures will increase to around 24 degrees in the afternoon. As a result, consumption will decrease for the time being. The warmer weather forecast applies to the whole of North-Western Europe.
In addition, the supply from Norway is reasonably strong. Production has been stable for weeks and the minor disruptions that occurred in recent weeks have repeatedly turned out to be a storm in a teacup. This also applies to the strikes at the Gullfaks B and C fields. These most likely caused a somewhat lower output this week, although it is now clear that the damage from this remains relatively limited. The volumes of gas extracted from the fields are relatively limited. In addition, the situation is expected to be restored by Friday. Finally, Germany has concluded a contract with Norway for 111 terawatt hours per year. This is the largest deal that Norway has concluded since 1986. That is approximately equal to a third of German industrial demand.
LNG price remains high
A factor that is slowing down an even stronger drop in the gas price remains the high price of LNG. Although temperatures in the region have dropped significantly and gas demand is much lower due to cooling, prices in Asia remain high. The heat wave has significantly reduced Asian reserves. As a result, the LNG price is decreasing much less quickly than the European gas price. The price of LNG was $13 per MBTu on Friday, September 13,675. That is 5,8% less than at the peak of the market on August 16. That day, the LNG price was $14,52. Nevertheless, the gas price is considerably higher than the rest of the year.
Electricity price stable
As in the past two weeks, the electricity price was fairly stable over the week. That is to say, there were few outliers, either up or down. Electricity was the most expensive on Thursday, September 12. That day, electricity was traded for €101,94 per megawatt hour. The price of electricity was the lowest on Sunday, September 15, although a significant drop, which is quite common during the weekend, did not occur. That day, the price dropped to €65,69.
About half of all electricity was generated by wind turbines and solar panels. In total, the two free sources accounted for 56,4% of the energy demand. As a result, 34,2% of the electricity was generated from the relatively expensive natural gas. Add to that the relatively high prices of last week, and you have the recipe for a relatively high base price for energy. The fact that energy prices were relatively high on Thursday and in the weekend is due to the distribution of the renewable sources. On those days, hardly any wind energy was generated, which meant that prices were not depressed across the board.
Despite those few windless days, the balance of energy generated from renewable sources is shifting from solar to wind again. The capacity generated by solar panels has dropped to 25,4%. In the summer, the share of solar collectors peaked at almost 44% of the total demand for electricity. The total capacity of wind turbines reached a maximum of 34%.