Green plans and economic laws are sometimes at odds. Ultimately, customers do not want to pay a 'green premium' according to the CEO of Fortescue Energie. That green energy does not necessarily have to be more expensive is evident from the Dutch electricity price, where wind turbines and solar panels have lowered the electricity price. The European gas market remained reasonably stable. Despite the sanctions, the Kremlin still casts its shadow over the gas market.
Gas remains, despite the somewhat milder weather in the news, quite expensive. On the TTF, the price hovered around €50 per MWh. On the American stock exchange, gas took a step back, especially yesterday. The price dropped by 6% from just above $4 to $3,68 per MMBtu.
A relatively low filling level is causing a bottom in the European gas market. The gas storages are 56% full as of last Saturday, according to figures from the umbrella organization for gas companies. The Netherlands is below the European average with a filling level of 41%.
Russian gas
The supply of gas from Russia remains a hot potato for the EU. Yesterday (Monday 27 January) the European Council reached an agreement on extending sanctions against Russia. European officials warned that not meeting the deadline of 31 January would have major consequences for, for example, the frozen Russian assets. Hungary and Slovakia are less critical of Russia than most other EU member states. Hungarian Prime Minister Orban in particular made a big deal of the fact that no Russian gas has been supplied via Ukraine since 1 January. The two countries have continued to receive large volumes of gas from Russia in recent years. There are alternatives, but they come at a price.
A solution seems to have been found for the loss of Russian gas, Ukrainian President Zelensky announced last weekend. Instead of Russian gas (and the money that it generates for the Russian treasury), Zelensky says he wants to work with gas from Azerbaijan. According to Zelensky, Azerbaijan has a large export capacity of 25 billion cubic meters. According to the Ukrainian president, that gas could be distributed to the EU via the Ukrainian infrastructure. However, various experts have their reservations about the plans for gas from Azerbaijan. The transport capacity could well have been estimated too optimistically.
Electricity took a step back this week. Power is not yet really cheap. The Epex spot day ahead closed yesterday at €89,18 per MWh. That does not make the Netherlands the most expensive in Europe. That honor went to Austria yesterday with €122,87 per MWh. The cheapest power can be found in France with €30,53 per MWh.
According to experts, the drop in electricity prices is related to better yields from solar panels and wind turbines. All in all, about a third of last week came from renewable sources, with a quarter from sun and wind. As a result, less expensive gas had to be co-fired.
Infrastructure
Knowledge and innovation centre ElaadNL expects that almost all trucks and vans will be electric by 2050. According to the researchers, market parties are convinced of the advantages of electric vehicles with batteries, mainly because of the lower costs in the long term. At present, only 3% of vans and less than 1% of trucks are electric. Getting the charging infrastructure in order will still be quite a challenge, according to ElaadNL. The institute expects that 75% of the charging demand will end up on industrial estates.
The chief executive of Fortescue Energy, a subsidiary of Australian mining company Fortescue, is less convinced about green hydrogen as an alternative to fossil fuels. "The green hydrogen and ammonia sector is not where we thought it would be," Mark Hutchinson told Reuters between meetings at the World Economic Forum in Davos. Demand has not been as expected, but Hutchinson hopes that demand for green hydrogen will pick up in the coming years. Before that happens, green hydrogen and ammonia made by electrolysers running on green electricity will become as expensive as grey hydrogen made from natural gas. "If you're waiting for someone to pay extra because it's green, forget it. Ultimately, the laws of economics will take care of themselves."