Feature Energy
Electricity price rises due to weak wind
The price of gas remained fairly stable after last week's increase. Initially, the gas price was quite negative, but due to colder weather, the price returned to its previous level. Meanwhile, the electricity price was quite high due to low yields from renewable sources.
After last week's decline, the gas price is currently quite stable. On Tuesday, September 3, gas was traded for €37.19 per megawatt-hour. On Wednesday, September 4, the price dropped to €35.80. Then the price rose again. On Monday, September 9, the gas price was around €37.16 per megawatt-hour, back to its previous level.
Until the beginning of this week, the gas price had decreased significantly. While the demand is still low, the supply from Norway was particularly strong. In addition, the gas reserves are well filled. The fill level is currently at 92.8%, which has kept any price increase at bay for a long time. The higher gas price is reflected in the fill rate. In the past week, the speed at which the gas reserves are replenished has decreased from around 3,000 gigawatts per day to a pace between 600 and 1200 gigawatts per day.
However, this week saw a change. This is largely due to worse weather. In the coming weeks, not only rain is expected, but significantly cooler weather in Northern Europe. This will lead to colder than average weather for the next seven to ten days. This will at least result in less efficient operation of gas power plants, but in northern countries like Scotland, it may also mean that heating will be turned on here and there.
In addition, importing extra gas is still expensive. Meanwhile, Asian LNG prices are still close to their peak levels. Although the price is now below the late August peak level of $14.07 per MMBtu, the last known level of €13.79 on September 6 is still very high.
Electricity price over summer day
Meanwhile, the electricity price was quite high at the beginning of this week, but decreased significantly towards the end of the week. At the beginning of the week, the electricity price was above €100 per megawatt-hour, reaching a peak of €130.92 per megawatt-hour. On Sunday, September 8, the electricity price was the lowest at €66.73.
Despite the lower gas price, the electricity price was significantly higher at the beginning of this week. A relatively low share from renewable sources resulted in higher prices. In total, the combined share of solar and wind energy decreased.
Especially in the first three days of last week, prices were high with a listing above €100 per megawatt-hour. During those days, wind energy production was almost nil, making the market mainly dependent on gas at night. The peak price on Tuesday occurred when solar intensity was disappointing, and on Wednesday, solar energy production also fell short. Wind strength increased in the last working days of the week, leading to price decreases. However, renewable energy yields decreased over the weekend, keeping prices relatively stable.
Prices decreasing
It is not surprising that renewable energy production is somewhat decreasing at this stage. The number of sunny hours significantly decreases at this time of year, reducing solar panel production. However, it is still early for autumn-like winds, but this is expected to change soon. Prices are expected to decrease in the coming weeks. The cold weather pushing up the gas price is likely to lead to increased wind. Overall, this tends to keep the electricity price consistently low.
