The gas price has risen again this week. Colder weather and uncertainty about supply have pushed prices on the TTF higher. At the same time, the electricity price is falling due to the greater availability of solar and wind energy.
The gas price is taking another step up this week. On November 19, gas was traded for €45,67 per megawatt hour. On Monday, November 25, the price rose to €48,15.
The gas price remains in the grip of the temperature. At the end of November, somewhat lower temperatures are expected in Northern Europe. In the Netherlands, for example, just before December, it will be between 2 and 3 degrees at night and 6 to 7 degrees during the day. That is lower than the average temperature for this time of year of around 5 degrees. The expectation is that the temperatures will result in a somewhat higher heating demand.
However, the temperatures are not too far off the average. From December onwards, temperatures are even expected that are around the seasonal norm. The higher price is therefore mainly the result of an uncertain supply. Until Monday 25 November, the Russian gas supply remained at the same level despite a dispute with the Austrian energy company OMV. After OMV won an arbitration case against the Russian state-owned company Gazprom, the energy company decided to claim €230 million in gas, it was announced on Monday. This ends a fifty-year trading relationship.
The market expects Europe to miss out on more Russian gas in the short term. As of 1 January 2025, the Ukrainian transit contract for Russian gas to Europe expires. The war-torn country is no longer prepared to transit Russian gas. In 2023, 14,8% of European gas still came from Russia. Of that, 8,7% was pipeline gas. This volume will now expire. Hopes remain pinned on a quick deal with Azerbaijan. The country could take over the old volumes from Russia and supply them via Ukraine. However, the deal has not yet been finalised.
Reserves are falling rapidly
As a result of the imbalance between supply and demand, the level of gas reserves is falling almost twice as fast as usual. As a result, the reserves are only 88% full. The filling level was 95,5% at the beginning of November.
For now, it seems that Europe is dependent on the LNG market and that has its price. Europe is fully competing with Asia. This leads to LNG prices of around $15 per MMBtu. That translates to a level of over €48 per megawatt hour. Last week, the LNG price was still at a level of around €13,50 per MMBtu.
Electricity price dropped
Electricity prices have dropped this week compared to the week before. The price was highest on Thursday 21 November, at €121,96. The week before, the electricity price exceeded that price for no less than three weeks. The price dropped significantly over the weekend. On Sunday 24 November, the price dropped to €13,74.
In contrast to the last weeks, renewable sources caused a significant drop in the electricity price. In total, 37,5% of all electricity was generated by wind turbines. Add 6% of solar energy and you get a total of 43,5% from renewable energy. That is considerably more than the last two weeks. Last week, the production from these sources was only 27,3%. As a result of the higher generation from renewable sources, the electricity price dropped, especially at the end of the week. From Thursday, the wind power increased significantly, but the number of hours of sunshine also increased.
As a result of higher production from renewable sources, the share of gas-fired power stations fell to 30,4%. A substantial utilisation of coal-fired power stations and a large share of biomass also depressed the price. 10,8% of electricity was generated by coal-fired power stations. The share of biomass came to 7,7% this week.
On Sunday 24 November, a lot of renewable energy was generated. This was helped by a nearly constant supply of roughly 10 gigawatts of wind energy per 10 minutes. In addition, there was a fair amount of solar energy. At the peak of the day, 6,7 gigawatts of solar energy were generated per ten minutes.