Europe’s energy crisis has hit new levels driven by a perfect storm of surging demand and falling output from renewables.
Across the continent prices per megawatt-hour (MWh) now exceed €300 (£256) in most countries.
Except for Poland and Scandinavia, all countries in Europe have broken the €300 MWh barrier with France and Switzerland nearly at €400 (£341.60).
Head of Analytics at research firm Enappsys Andre Bosschaart said he’d “never seen this kind of volatility and high prices” adding that predictions for tomorrow’s prices suggested France and Germany would break past €400 (£341.60) MWh.
Head of Oil and Gas Research at Investec Nathan Piper described the prices as “phenomenally high”, adding that gas prices were now 10 times higher than the US in Europe.
Speaking to Express.co.uk Mr. Piper explained higher gas prices were, in turn, driving up electricity prices due to gas being increasingly used to generate electricity.
This year has seen power output from the wind fall in Europe, meaning gas has been increasingly relied upon.
Meanwhile, Asia has seen a fall in output from hydroelectricity increasing demand for gas and further straining prices.
While electricity demand typically increases in winter, Mr. Bosschaart explained wind power production would usually be higher than in the summer, with this year proving an exception.
He described the current mix of low wind power and surging demand as “a perfect storm.”
Mr. Piper added that Europe was “reliant but not self-sufficient” in gas given that it imports 70 percent of its requirements.
Like electricity, gas prices typically peak in winter, however, the current levels are particularly marked.
Richard Howard, Research Director at Aurora Energy Research, said that such prices had not been seen “for at least five years.”
Germany for example saw average prices at €44 (£37.48) per MWh last December, today it reached €331.37 (£283) MWh.
As well as rising prices of gas itself energy producers have also faced rising carbon prices in Europe, adding to the cost of energy.
Prices for the emission permits under the European Emissions Trading scheme have risen considerably this year as the European Commission aims to tighten emissions by reducing permits.
Because of the demand for gas, coal has also been brought into the mix for energy generation further increasing demand for carbon permits.
Although some countries have argued for the carbon market to be relaxed, Mr. Howard explained this was “politically very difficult” with the current strong emphasis on net zero, meaning the EU Commission would likely stand firm.
Looking forward, Investec predicts higher prices are likely to persist throughout winter and could even stretch into the next two years.
h/t John K.
Read rest at Daily Express
It’s a shame there isn’t an always-on form of energy that emits no CO2, where 18-24 months of fuel can be kept on-site. That sure would have been a useful technology for humanity right about now.