Analysis Energy
Renewable energy often possible without subsidy
After a stable period, the price of oil is on the rise again this week. There is also a trend reversal in the electricity market. For weeks there were large peaks in the supply of electricity. This week there was less imbalance in the electricity market than we were used to in the past period.
Due to the cloudy and showery weather, the yield of solar panels was lower. As a result, there have been no major peaks in the supply of electricity. The average electricity price this week was €58 per MWh. On Sunday 11 April, the price was €48,87 per MWh on the EPEX spot listing. On Wednesday 14 April, that rose to €66,57 per MWh. The price range is therefore much smaller than in previous weeks.
Milder weather is forecast for the coming week. This will probably reduce the demand for electricity. The weather reports predict sunny and relatively windless weather. There is therefore probably more supply of solar energy and less wind energy on the electricity grid than last week. Analysts expect electricity prices to be stable to slightly declining next week.
Subsidies are not always necessary
Renewable energy projects can in many cases do with much less subsidy. This is the conclusion of research by Daan Hulshof, researcher and lecturer at the University of Groningen. The subsidies ensure that investors achieve relatively high profits or excess profits on their subsidized projects. Hulshof calculated that this excess profit for an average profitable project is 30%.
"This means that the government has to levy more tax on, for example, gas and electricity," says Hulshof in the press release. "This is not only inefficient, but also undesirable because of the injustice it entails. These subsidies, largely provided by citizens, are intended to contribute to achieving our climate goals and not to over-reward investors." Hulshof therefore argues in favor of examining the current subsidy system.
Protest against coal ban
The German energy company Uniper announced today (Friday 16 April) that it may take legal action against the Dutch state. The company opened a new coal-fired power station on the Maasvlakte in 2016. Due to changes in legislation regarding the use of coal, this power station must now be closed before January 1, 2030. That is roughly 15 years before the end of the life of the power plant and without compensation.
“Uniper has set itself the goal of being carbon neutral by 2035,” said David Bryson COO of Uniper. "In our view, the Maasvlakte is a perfect location for the production of green hydrogen with which we can play a major role in achieving the Dutch hydrogen ambitions. We therefore hope to arrive at a solution that is acceptable to all parties."
Oil price rising
The price of crude oil has risen this week. On Monday, a barrel of Brent crude was trading at $63,13. That rose to $66,95 for a barrel today (Friday, April 16). The market is thus anticipating further economic recovery in North America and a number of European countries. Vaccination programs in, for example, the US and UK are starting to bear fruit and public life is gradually resuming. The relatively weak dollar exchange rate gives an extra boost to the oil price.
According to analysts, the oil market appears to be gradually building momentum to break the top of the price line. Whether the oil price increase will continue is uncertain. Given the rise in other commodities this week, analysts say it could go either way. A correction is possible, but there are also signs that bullish sentiment is continuing.
American farmers are ordering diesel en masse
The US Energy Information Administration (EIA) reported earlier this week that fuel inventories fell by 2,1 million barrels last week. American farmers in particular are currently stocking a lot of diesel, the EIA reports. The planting season is about to start or has already started and farmers are now filling the tank.
In the Netherlands, the diesel price has also risen this week. Although agriculture will have a much smaller role in this. Monday, April 12, diesel cost €101,20 per 100 liters. Today, April 16, that has increased to €102,59 per 100 litres.
Jurphaas Lugtenburg
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