The gas price has fallen further this week, but has now also been corrected upwards. This has resulted in a unique situation. The reserves have been used less than average. This is also noticeable on the electricity market, although burning coal is still profitable.
The gas price fell sharply last week, but rebounded this week. On Tuesday 4 March, the TTF was at €43,46 per megawatt hour. On Thursday 6 March, the gas price was 12% lower and gas was traded for €38,24 per megawatt hour. On Monday 10 November, however, the gas price rose again by 6,4%, to a level of €40,67.
The nice weather has put a lot of pressure on the gas market prices last week. The higher temperatures ensure that the demand for gas for heating was a lot lower than in the weeks before. In addition, the sunny weather helped a little. Due to the almost cloudless weather, the productivity of solar collectors increased considerably and the demand for gas for electricity production decreased. Although the effect was slightly inhibited by the low wind force, which ensured that the turbines did not work too hard. This had the direct effect that the gas reserves were used up less quickly than average.
The question is how long this optimism will last. The correction in the gas market later last week is largely due to the prospect of a turnaround in the weather later this month. It is getting colder again, which means the heating season is not over yet. The expectation is that the gas reserves will not yet have reached their lowest point, although that is not to be expected based on the long-term average. On average, the gas reserves would reach 41,6% on 8 March. Historically, the reserves are at their emptiest around 31 March. On average, the reserves fall to 38,4%. The filling level has now fallen below that point. According to the latest available data from 8 March, the European gas reserves were 36,8% full. The Dutch gas reserve was meanwhile 10% full on 25,1 March.
Fill target remains in place
In addition, the European Union decided not to adjust the filling targets of the gas reserves downwards. Several countries, including the Netherlands, urged the EU to store less gas. The main argument for this is that the target would drive up prices, because traders can see how far behind the targets countries are. However, Brussels has decided that abandoning the target would be too risky. The Commission does see that filling the reserves in Northern Europe could be a very big challenge this year. The EU therefore wants to accommodate the countries by being more flexible with countries that fail to achieve the targets. This new attitude should prevent excessive fluctuations in the market, without throwing the baby out with the bathwater.
Solar energy sets the trend
Meanwhile, the electricity price had few clear peaks and troughs. On Wednesday, March 4, the electricity price reached its highest point at €105,68 per megawatt hour. The lowest price was on Thursday, March 6. That day, the electricity price was €84,71 per megawatt hour.
As already mentioned, much more solar energy was generated this week than in previous weeks. In total, solar panels accounted for no less than 29% of the entire Dutch electricity demand. On the other hand, Dutch wind turbines only had a small share in the energy mix. In total, their percentage amounted to 9% of the electricity.
The weather pattern remained more or less the same throughout the week. This explains the unusually stable situation on the electricity market. Almost every day, a lot of solar energy was generated between eight in the morning and six in the evening. This caused the electricity price to drop significantly during productive hours. The electricity price clearly reaches its lowest level around 12:00, when solar energy production peaks. The market reaches its peak around 18:00. At that time, solar energy production is practically zero, but gas demand is high, because many people cook and turn on the television to relax after work.
Coal profitable through renewable generation
In addition, the lower gas price is putting more or less constant pressure on the electricity price. This effect was relatively large this week. Approximately 31,8% of all electricity was generated by gas-fired power stations. However, the gas price is still so high that the use of coal-fired power stations proved profitable. The power stations operated at around their maximum capacity and accounted for 15,4% of the electricity demand. Paradoxically, it is the strong generation from renewable sources that makes the use of coal-fired power stations profitable. Due to the lower consumption of fossil fuels, the European CO2 price has fallen to €68,63. On 31 January, the CO2 price reached a peak of €83,93.
Renewable energy generation continues to rise
Data from Statistics Netherlands (CBS) shows that the share of electricity production from renewable sources has increased significantly again in 2024. Electricity production from renewable energy sources, including biomass, increased by 2024% to 10 billion kilowatt hours in 61. Production was highest in April, with 63% of electricity coming from renewable sources. As a result, electricity generation from fossil sources fell by 4%.
Despite lower solar activity, electricity production from solar energy in the Netherlands increased by 2024% to 11 billion kilowatt hours in 22. The growth is attributable to an increase in installed capacity, which increased by 14% to 24 gigawatts. Meanwhile, electricity production from wind energy increased by 13% to 33 billion kilowatt hours. While generation by onshore wind farms remained virtually the same, production from offshore wind farms increased by 32% to 15 billion kilowatt hours. The capacity of onshore wind farms hardly grew, while at sea it increased by 19% to 4,7 gigawatts.
Electricity production from coal fell by 2024% in 5 compared to the previous year, while production from natural gas fell by 4%. The main cause is the greater supply of cheaper electricity from solar and wind energy. In total, electricity generation from fossil sources fell by 2,5 billion kilowatt hours in 2024. In addition, production from biomass fell by 6%, mainly due to lower use in coal-fired power stations, where biomass is co-fired.