Weekend, sun and a lot of wind. This is the trident that comes together this Saturday to send the average price of a megawatt (MWh) of light to levels that have not been seen since before the outbreak of the energy crisis in the summer of 2021.
It would be necessary to go back to June 20 of that year to see a price lower than the 55.20 euros that will be paid on average this Saturday. That day 52.63 euros were paid.
Saturdays are usually one of the cheapest days of the week due to the drop in industrial consumption; and to this is added that on November 19 the sun and, above all, the wind will allow a strong contribution from renewable energies (wind power covered 50% of demand yesterday) and a lower need for electricity from power plants. combined cycle that use gas.
In this context, the auction in the wholesale market marked an average price for this Saturday of 67.38 euros per MWh, with a maximum of 123 between 9:00 p.m. and 10:00 p.m. and a minimum of 22 euros per MWh between 1:00 p.m. and 2:00 p.m. hours, according to data from the Iberian Energy Market Operator (OMIE).
Added to this is the effect of the Iberian exception mechanism approved last May, by which combined cycle plants are compensated for gas prices above 40 euros. However, tomorrow the result will be negative due to the compensation that will be received for electricity exports to France. In this way, the final price of the MWh is cut to 56 euros, half of what was paid yesterday.
The price of gas is key in the formation of the price of electricity, since it is the last energy that enters the auction to satisfy the demand that cannot be covered by the rest, and therefore, it sets the price.
The high temperatures, unusual for this time of year, have given gas prices the first breath in international markets since Putin launched his war escalation on the energy front in the summer of 2021. What has translated into savings in heating and full reserves in most countries. Less demand, less price.
The MWh of gas in the European reference market, the Dutch TTF index, was trading yesterday at 113 euros, very far from the more than 349 euros it reached in August and which set off all the alarms.
An alert that in no case can be considered to have disappeared. Quite the opposite. The arrival of winter is very disturbing for the main European energy companies, which are strengthening their balance sheets to face the escalation of prices that are expected when temperatures drop and gas reserves are reduced.
The expected increase in demand in Asia will also play against the price of gas in Europe. The countries of that part of the planet have not competed with Europe as consumers of liquefied natural gas (LNG) during the last year. It has been prevented from doing so by the drop in activity caused by the continued stoppages in its factories due to the zero covid policy. Looking ahead to the coming months, this trend is expected to change and Asia can compete with Europe to capture the methane tankers that roam the planet in search of the highest bidder, which would also push up gas prices and, therefore, , of the light.
