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In the Energy BrainBlog, we inform you about the latest in power and energy trading in Europe. We regularly produce summaries as well as detailed reports on energy policy, energy supply, price developments, commodity markets and more.
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In August 2022, the energy market shows price records in short-term trading due to news about the Nordstream 1 pipeline. Price records are also set on the futures market. The traffic light coalition puts together a third relief package. The introduction of the gas procurement levy leads to a heated discussion.
Prices on the European spot markets for electricity are at their highest levels since the beginning of exchange trading. The exchanges had to introduce higher price limits to react to the situation. What is currently happening on the short-term markets and what will happen in winter?
Energy markets remain in turmoil in July 2022 due to the ongoing Russia-Ukraine war, with prices in the short-term and futures markets fluctuating as a result of new developments. Energy company Gazprom cuts supplies by half. To reduce Germany’s dependence on Russian gas, there are plans to bring back hard coal and oil-fired power plants that are waiting in the grid reserve. The Bundestag initiated a new amendment to the Renewable Energy Sources Act, where the expansion targets for renewable energies were raised.
The German Minister of Economy and Climate Protection Habeck has declared the second of three warning levels of the Emergency Gas Plan. Besides that, the EU Parliament agreed on a reform of emissions trading. Finally yet importantly, the tenders for onshore wind turbines were unsubscribed for the first time in three bidding rounds. A bullish mood prevails on the short-term markets as well as on the futures markets.
After comparing the major European countries, this post is about two smaller ones: Portugal and Denmark. Both are pioneers in renewable energy. However, Denmark outperforms the larger Portugal where natural gas still plays a significant role, as a look at the figures shows. Both countries have ambitious energy and climate targets for 2030.
After the outlook for European gas-supply security improved significantly in May 2022, current developments are worrying. First, it is announced that US LNG export capacity is limited for the near future, then Russia significantly cuts supply volumes via the important Nord Stream 1 pipeline.
The energy markets remain in turmoil because of the ongoing Russia-Ukraine war. Besides that, the short-term and futures markets continue to react to new developments with price fluctuations. With the REPower package, the EU is outlining a path to independence from Russian fossil fuels towards the accelerated expansion of renewable energy sources. In addition, the Federal Network Agency has announced the results of the tenders for second segment solar plants and the innovation tender.
After comparing the German and French energy systems, we now look at the number three and four in the EU: Italy and Spain. Both countries have a power plant fleet and electricity generation of similar size. However, Italy’s power generation is based on natural gas, while Spain generates larger shares of its electricity from wind power and nuclear power. A look at the figures below reveals similarities and differences.