The gas price has taken a clear step downwards this week. The European gas price is now well above the LNG price. The situation on the electricity market was clearly divided into two phases. At the end of last week, prices were considerably lower than in the week before.
The gas price has taken a clear step down. Tuesday September 3rd the gas price was still €48,56, but by Monday December 9th the price has dropped to €45,68.
The market is clearly starting to respond to the lower supply and higher prices, which is turning the situation somewhat positive and also lowering the price. According to credit rating agency S&P Global, LNG imports to the Mediterranean rose to a nine-month high in November. This should not come as a complete surprise. Due to lower temperatures and low power generation from renewable sources, gas supplies in that area fell sharply. Imports are still rising significantly; in the first week of December, LNG imports reached their highest level since January 2024.
Due to the strong supply, the price of LNG remains stable. Prices on the Asian market are around $15 per MMbtu. This makes the Asian LNG price clearly more expensive than gas in Europe. Converted, the LNG price amounts to €48,71 per megawatt hour. The fact that the price does not increase due to the greater European demand is due to relatively low demand from China. That is why LNG with this destination is resold to Europe.
Due to the increase in LNG imports, the difference between the current decrease in the filling level and the long-term average decrease in the filling level is smaller than three weeks ago, although the effects of the colder weather are clearly visible on the market. On December 1, the gas reserves were 85,1% full. On December 7, the filling level was 2,3 percentage points lower, namely 82,4%. However, there is still no real good news. The gas reserves are still being used up faster than average.
Electricity price rises sharply
The electricity price was on the high side for two days last week, but later in the week the price dropped significantly. A clear peak was seen on Wednesday 4 December. The electricity price reached the level of €176,12 per megawatt hour that day. That is the highest level since January 2023. After that, the price dropped significantly again, with the lowest point on 7 December, when electricity reached a price level of €66,27.
This week, the amount of renewable energy generated increased significantly. The capacity of wind turbines was considerable. In total, 39,2% of the electricity was generated by wind turbines. 5,1% of all electricity came from solar panels. This brings the share of renewable energy to 44,3%.
Renewable energy generation split in two this week. Very little renewable energy was generated on Tuesday and Wednesday, which caused electricity prices to be very high. The following days, considerable wind force caused prices on the electricity market to be significantly depressed. On Thursday and Friday, it was not unusual for more than 8 gigawatts to be generated every ten minutes. On Saturday, the share of renewable energy was slightly lower. However, lower industrial demand over the weekend caused prices to be significantly lower.