The decline in the gas market proved to be only temporary. Due to a failed attempt to extend the deliveries of Russian gas via Ukraine, the gas price has been corrected sharply upwards. In the meantime, the mild weather has clearly had a positive effect on the gas reserves. In addition, the electricity price fell considerably due to the strong wind.
The gas price has taken another big step up after the significant drop of the last few weeks. On Tuesday 17 December, gas was traded for €42,06 per megawatt hour. On Monday 23 September, the TTF had risen to €45,55.
Compared to the low of Monday 16 December, the gas price has risen by 13%. In particular, the tension over the last delivery of Russian gas is providing upward momentum. Several Central European countries still receive pipeline gas from Russia. However, that gas flows through Ukraine, and the war-torn country is not interested in continuing the supply after the expiration of the transition deals. Prices rose sharply after it became even more unlikely that Eastern Europe cannot count on an extension of the deliveries of Russian gas. Both Moscow and Kyiv stated that a renewal of the deal is not in the cards.
European Commission President Ursula von der Leyen has made a last-ditch effort to extend the transit deal for Russian gas to Europe via Ukraine, despite the European desire to phase out Russian gas. The attempt followed a letter from Hungary, Slovakia, Austria and Italy in which the countries argued that they would face problems without Russian pipeline gas in their supply. Although neither Russia nor Ukraine has shown much interest in a new deal, both parties are still talking to delegates from the European countries concerned.
Reserves are shrinking less rapidly
Meanwhile, the milder weather is having a clear positive effect on the gas market. In general, slightly more gas is being extracted from the reserves than average, but compared to the rest of the autumn, the stocks are shrinking much less sharply. This is a welcome situation, now that the 5 percentage points of extra filling that was built up during the summer have been used up. In practice, the filling level of the gas reserves has been roughly in line with the average since December. On Tuesday 21 December, the reserves were 75,9% full, compared to the long-term average at this time of year of 75,1%.
Electricity price quite low
Meanwhile, the electricity price was quite low. Last week, the prices on the electricity market were considerably lower than the rest of the fall. On Tuesday, December 17, the Epex reached the peak level of €89,95 per megawatt hour. After that, the price dropped considerably. On Sunday, December 22, electricity was traded for only €27,45 per megawatt hour.
Up until now, the electricity price has been on the high side this fall. In the first months, the wind was considerably less strong than in the last two years, which caused the production of renewable energy to be disappointing. Last week, the situation turned around and an exceptional amount of wind energy was generated, causing the electricity price to drop sharply. In total, no less than 53,7% of all electricity was generated by wind turbines. However, the productivity of solar panels fell to the lowest point of the year of 2,2% due to the short days and the dark weather. In total, the percentage of renewable energy came to 55,9%. Partly because of this, the share of gas-fired power stations fell to 25,7% and coal-fired power stations accounted for 4,9%.
Not surprisingly, prices fell mainly on days with strong winds. On Saturdays and Sundays, there was some additional price pressure. Every weekend, electricity demand drops because most offices are closed, but now that Christmas is just around the corner, economic activity is falling even further because many employees are going on vacation.