On Thursday, April 11, Russian missiles and drones destroyed a large power plant near Kyiv. Several other power plants in the country were also affected, Reuters news agency reported.
Because of these attacks, the price of natural gas is experiencing upward pressure, with the contract going higher for calendar year 2025. The biggest uncertainty about supply next year probably lies in the expiration of the gas transit agreement between Russia and Ukraine at the end of this year.
Europe is already far along in becoming dependent on Russian gas, storage sites are full and infrastructure is in place to import liquefied natural gas. Reliance on LNG also brings vulnerabilities, especially when supply is not guaranteed through long-term contracts.
How does this affect electricity?
Over the past week, the short-term market saw several days of low prices, even seeing negative prices. Especially during the weekend, a combination of solar and wind power caused negative prices, with €-125.30 per MWh as the lowest point on Saturday between 1 p.m. and 2 p.m. This phenomenon is not limited to weekends or holidays and was also observed on a weekday such as Friday, with negative prices between 1 p.m. and 4 p.m., with the lowest point being €-10.02 per MWh.
Both the daily forward market and the intraday and imbalance markets showed very low prices last weekend. TenneT called off emergency power Sunday to balance supply and demand.
Besides the weather, France also affects prices because of their abundant supply of nuclear, water and wind energy, resulting in exports to other European countries.
Although next week will be temporarily colder and the wind will continue to blow, the price will remain at a level where fossil power plants will become active again, although around €60 per MWh is still considered low. In the longer term, prices are rising due to increasing costs for gas, coal and CO₂, with fluctuations such as a drop on Wednesday followed by an increase on Thursday.
How does Energy Excellent play into this?
We too have not overlooked this development. We are currently busy shaping our new purchasing collective for the coming years after 2024. Indeed, we have already done some of our purchasing at the lower rates now available. This means that both our existing customers and potential new customers can take advantage of discounted rates by hitching a ride on our collective.
Want to know more? If so, please feel free to contact us!
