Analysis Energy
Windless weather creates expensive electricity
It is not only in the Netherlands that there is discussion about onshore wind energy. There are also doubts in Norway. A consortium of entrepreneurs and scientists has started a research project into the possibilities of combining agriculture with the generation of solar energy. Meanwhile, the oil market has now absorbed the surprise of OPEC+. There has been no significant price change. It was different in the electricity market. It had unexpectedly high prices at the beginning of this week.
The electricity market was more volatile than expected last week. On Monday and Tuesday, March 8 and 9, the EPEX spot price shot above €60 MWh. This was largely due to the windless weather. The cold weather and the high gas price also played a role. Due to the stormy weather in recent days, the electricity price dropped quickly, reaching a low of €11 per MWh yesterday (Thurs 34,76 March).
The windy weather is expected to continue for a few more days, according to weather reports. The electricity price is therefore likely to remain low. Electricity prices will not rise again until the wind decreases early next week. Because the wind force varies greatly from hour to hour, there is a lot of imbalance in the electricity grid.
Norway has invested heavily in wind energy
In Norway, onshore wind energy has also exploded in recent years. Last year, the country added 1,53 GW of capacity, bringing the total to 3,98 GW. There is also the necessary discussion about the construction of wind farms. New legislation lingers in parliament and that could delay further expansion.
The new wind farms require adjustments to the electricity grid. That is a matter of national importance, according to the parliament. The local authorities should remain responsible for this and not the owners of the wind farms. There is also discussion about additional taxation on wind energy. That money should benefit the communities where the wind farms are located. Until these matters are settled, it is unlikely that new permits for wind farms can be issued.
Transparent solar panels
A new project has been started in the Netherlands to develop combinations of agriculture and solar energy projects. Under the name Sunbiose, various test setups are being developed and tested for different agricultural sectors. The emphasis is on fruit cultivation and open field vegetables with, for example, sliding arch tunnel systems or transparent roofs.
Wageningen University, TNO, and agricultural entrepreneurs from ZLTO and LTO Noord are involved in the project. The project involves an amount of €4,9 million. Almost €3,2 million of this has been made available by the RVO within the framework of a MOOI subsidy.
Small price increase diesel
The price of agricultural diesel has risen slightly this week. Last Monday (March 8), diesel for deliveries from 4.000 liters was €104,18 per 100 liters. This was mainly due to reports from OPEC+. Later in the week, the diesel price dropped slightly to reach €12 per 103,81 liters today Friday, March 100. Analysts expect the diesel price to remain stable next week.
OPEC+'s surprise to maintain the current production quota in April has now been processed by the market. There has been no further rise in the price of Brent oil after peaking last Friday at $69,69 a barrel. Things have calmed down this week and the price dropped to $9 a barrel on Tuesday, March 67,21. Meanwhile, the price has risen again to $69,50 per barrel today (Friday, March 12).
Crude oil price not rising
There are several reasons why the price does not continue to rise despite the extension of the production quota. Several analysts doubt whether Russia will stick to the restrictions in the coming period. In the spring and summer, it is easier to pump oil in Siberia. Past experience shows that the Russians find it difficult to resist this temptation and often increase their production. Saudi Arabia's voluntary production limit of 1 million barrels per day turns out to be slightly different in practice. The country is indeed pumping less oil, but export data shows that exports are maintained by drawing on stocks.
Possible return of Iran
Iran may return to the international oil market. The US administration, led by Biden, is expected to ease some sanctions against Iran. In anticipation of this, the Iranian national oil company is already surveying various Asian countries.
India has previously indicated that it is not happy with OPEC+ production quotas. The comment by Saudi oil minister Abdulaziz bin Salman that India should not complain about the higher oil price because the country has stocked enough cheap oil in 2020 has gone down the wrong way with the Indian government. They have ordered the state refineries to look for other suppliers outside the present countries in the Middle East. It is therefore quite conceivable that India will respond to Iran's advances.
Jurphaas Lugtenburg
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