Analysis Energy
Sun and wind depress electricity prices, oil continues to rise
The electricity market is characterized by a lot of supply, mainly solar energy. Due to the relatively high temperatures, there is little demand for electricity. Meanwhile, the oil market manages to maintain its upward momentum. Oil has already become about 30% more expensive since the beginning of this year.
The relatively high temperatures of recent weeks have brought calm to the electricity market. The sunny weather ensured that a lot of solar energy was supplied to the grid. In addition, there was also supply from the wind turbines. As a result, electricity prices remained at a relatively low level this week.
No major shifts are expected in the electricity market in the short term. The relatively mild weather with temperatures above the long-term average will continue for the time being. A sudden increase in demand is therefore unlikely. The market estimates the chances for a cold spell in March to be lower than last week. The base price for electricity in March has fallen by approximately €1,50 to €46,50 per MWh.
Eco label for solar parks
Wageningen University & Research (WUR), TNO, Eelerwoude, Holland Solar and NL Greenlabel announced this week that they are developing a certification for solar parks with ecological added value. Researchers will measure the effect of different management plans and design forms on plants, soil and animals in 20 existing solar parks. The guidelines and test values for the Solar EcoCertified label will be drawn up with the research results. That label should be an addition to the current SolarEcoplus label.
Hydrogen projects EU
Important Projects of Common European Interest (IPCEI) announced yesterday (Thurs 25 February) the results of an inventory of hydrogen projects in the EU. This shows that 200 project proposals have been submitted in Germany seeking funding under the IPCEI flag. The largest proposals in Germany are for a 500 MW electrolyzer in Duisburg-Walsum and a 200 MW electrolyzer in Hamburg. France also has plans for a 200 MW installation in Port Jerome-sur-Seine.
Oil and diesel more expensive
Crude oil holds up well to relatively high prices. On Wednesday, the Brent oil quote peaked at $67,31 a barrel. The price has since dropped again. Today (Friday, February 26), a barrel of Brent is trading at $66,15. Following the crude oil price, the diesel price is also taking a step up. Diesel today costs €102,60 per 100 liters.
Market under the spell of production expectations
Looking at the price, it looks like there is a shortage of oil. That could change in the coming weeks. Currently, OPEC+ members are keeping about 7 million barrels a day off the market. Traders are watching the outcome of the OPEC+ negotiations with growing suspense. The participating countries will meet on March 4 to determine the production quotas for April.
Reuters reports that OPEC+ members are considering increasing production by 500.000 barrels. However, there is no consensus on this yet. Russia is likely to push to increase production further, while Saudi Arabia will exercise more caution. It should be taken into account that the additional voluntary production limitation of 1 million barrels of Saudi Arabia will expire at the end of March.
At the current prices, the extraction of shale oil is also economically interesting. It is mainly produced in the US. According to the US Energy Agency (EIA), US production remains stable at 11 million barrels per day. However, several analysts expect manufacturers to be unable to resist the temptation and ramp up production from existing locations.
Jurphaas Lugtenburg
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
