The price of gas decreased last week, but this week there was a clear increase. Meanwhile, the price of electricity has actually decreased due to a higher capacity of wind turbines.
The price of gas has risen again after the increase of previous days. On Tuesday, September 24, the gas price was at the lowest level of the week. That day, gas was traded for €36.19 per megawatt-hour. Until Monday, September 30, the price rose. That day, the TTF reached the level of €38.97.
The main reason for the higher prices is a significant drop in temperatures in Northern Europe. In the coming weeks, it will be considerably colder. Especially at night, it can get quite cold. Night temperatures will sometimes drop below 10 degrees in the coming weeks. It is expected that heating systems in, among others, the Netherlands, Scandinavia, and Germany will be turned on here and there. In addition, gas power plants are less efficient, especially at night.
Furthermore, the slow decline in LNG prices has temporarily stopped. Since the low point of €12.83 per Mmbtu on September 19, the leading Asian LNG benchmark has slightly risen again. On Friday, September 27, liquefied gas was traded for €13.21. This is while the summer has ended and the Asian demand for LNG from air conditioners has decreased. The higher LNG price slightly lifts the TTF. Analysts also indicate that the filling of gas reserves is slowing down as ships are diverting to Asia. However, the effects of this are limited, as European gas reserves are filled to 94%.
Impact of completed work limited
Due to the lower temperatures and high LNG prices, the repair of the pipeline between the Netherlands and the United Kingdom barely put pressure on European gas prices. From September 19 to Sunday, September 29, the pipeline was under maintenance. Normally, the availability of the pipeline would have slightly lowered prices.
Low electricity price
The electricity price was on the low side this week. On Wednesday, September 25, the gas price was at its highest point of the week. That day, gas was traded for €96.17 per megawatt-hour. After that, the electricity price decreased significantly. On Friday, September 27, the price of electricity dropped to €20.01. Additionally, after September 25, the electricity price did not exceed €69.
The generation from renewable sources increased slightly this week. The total generation from renewable sources amounted to 56.5%. Last week, that percentage was 52%. While this may be a relatively small difference, a change in the distribution of energy types actually further lowered the price. As we enter the winter pattern again, the percentage of solar power decreases and the amount of wind energy increases. Where 28.5% was generated by solar panels last week, this percentage decreased to 18.7% this week. Meanwhile, the percentage of wind energy increased from 23.5% to 31%. Because wind is generally more consistent than solar energy, the price of electricity is constantly pushed down. This results in a relatively low price.
More than 50% renewable
A recent analysis by the CBS shows that in the first half of 2023, for the first time in half a year, more than half of all electricity was generated from renewable sources. In total, 53% of the total electricity, or in absolute terms 32.3 billion kWh, was generated from renewable sources.
This is the result of a significant increase in generation from renewable sources. The capacity of wind energy increased by 4.4 billion kilowatt-hours to 17.4 billion kilowatt-hours. Two-thirds of this consisted of offshore wind turbines. Meanwhile, the capacity of solar panels increased by 0.8 billion kilowatt-hours to 11.7 billion kilowatt-hours. This figure is somewhat inflated, as the amount of sun this year was lower than in previous years.
The higher yields mainly come at the expense of coal power. The total capacity of coal-fired power plants decreased by just under 40% to 3.9 billion kilowatt-hours. Production from biomass, on the other hand, decreased by 16%. The larger share from renewable sources leads to an increase in trade. In total, electricity imports increased by 4%. Exports increased even more, by as much as 10%.