Analysis Energy
Top week solar panels on the way, what is the energy market doing?
The weather change is also causing a turnaround in the electricity market. In May, the yields of solar panels were disappointing, but that is about to change. The oil price is on the rise again. Is the pattern of recent weeks repeating and can we expect a decline next week?
Last weekend, electricity prices were around €30 per MWh on the EPEX Spot. That was the result of the stormy weather. The fact that the price did not fall further was due to the clouds and the showers. As a result, the supply of solar energy was limited. However, from Monday (24 May), electricity prices have risen sharply. Today (Friday 28 May) the electricity price is €71,60 per MWh.
For the coming week, analysts expect the electricity market to stabilize. The temperatures are rising and the weather reports are expecting sunny weather. During the day there is therefore considerably more supply of solar energy. However, the supply of electricity from wind is less than we were used to in recent weeks. Peaks in hourly prices can therefore still be expected early in the morning and late at night.
Oil more expensive again
The oil price will pick up again this week. On Monday (May 24), a barrel of Brent crude was trading at $68,44. That rose to $28 a barrel yesterday (Friday, May 69,79). We have seen this movement regularly in the oil market lately. Reports of economic recovery are pushing the price up a bit, but when the $70 per barrel is about to be breached, news follows causing the price to fall again. That seems to be happening now.
Traders eagerly await what OPEC+ will decide at its June 1 meeting. The expectations are that the oil countries will stick to the planned production increase. In July, an additional 840.000 barrels per day will be pumped. That is the latest step in a schedule, with production ramping up in recent months to a total of 2 million barrels per day.
Negotiations between the US and Iran are also keeping the market busy. An agreement seems imminent. The US Secretary of State said earlier this week that a deal is "top priority". According to his Iranian colleague, the sticking point is when and in what order the 2015 nuclear treaty will be complied with again.
The diesel price has remained stable at around €103,50 per 100 litres. According to various analysts, that will not change much in the near future. The oil price forms the basis and it appears to remain stable. Nor is a large increase in demand expected in the long term.
Extra supervision needed
A coalition of Belgium, Germany, France, Luxembourg and the Netherlands will work on better monitoring of biofuels. The sector is growing, which is why, according to the countries, it is necessary to additionally guarantee the sustainability of biofuels. The countries call on the European Commissioners Frans Timmermans (climate) and Kadri Simson (energy) to work on better supervision and enforcement within the EU. According to the 5 member states, amended European legislation provides a firmer basis for private and public supervision.
Europe has ambitious climate goals and aims to have no greenhouse gases by 2050. But for the time being, biofuels will mainly remain in the logistics sector necessary. The condition is that sustainability is guaranteed. And according to the 5 countries, good supervision is needed for this. An obstacle here is that the production chain of biofuels is often spread over several countries. The majority of European biofuels are produced in the Benelux, Germany and France.
Jurphaas Lugtenburg
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