Energy catastrophe: electricity smashes all records and stands at 544.98 euros/MWh

Electricity prices break the historical record again. Electricity will be paid tomorrow 544.98 euros / average MWhwhich represents an increase of 102.44 euros, 23% higher than the previous historical maximum registered today at 442.54 euros euros/MWh.

The most expensive hour will reach 700 euros/ MWh at 8 in the afternoon, 200 euros more than yesterday’s maximum. On the contrary, the cheapest will be at 4 in the morning, at 424.88 euros. In the elapsed of 2022 electricity becomes more expensive by 344%. If we expand the vision just a year ago, when it marked 54.43 euros/MWh, multiplies by 10.

Along with the arrival of a cold front in the Iberian Peninsula, this increase responds to movements in natural gas prices during the day, given the growing possibility of interrupting purchases due to an increase in sanctions against Russia for the invasion of Ukraine . Dutch TTF futures, the benchmark gas in Europe, are listed more than 28% until reaching more than 247 dollars for the next month of April, although first thing in the morning they have reached 345 euros.

With this scenario the market is completely broken. Asia usually used European prices as a floor reference but the differential that historically existed has not only disappeared but gas is quoted at a higher price in Europe to attract LNG ships from the market.

Yesterday’s price of PVB in Mibgas reached 194.15 euros; in France the PEG stood at 185.31; at PSV in Italy at 199.75 and at NBP in the United Kingdom at 192.20. Interestingly, all of them are above the price recorded on the JKM in Asia at $122.63.

energy security

The International Group of Liquefied Natural Gas Importers stresses that energy security problems are becoming a major concern in Europe and are increasingly spreading to other regions, especially as a result of the conflict between Russia and Ukraine. He also asserts that the reliability and flexibility of LNG are critical to the security and diversification of energy supply and that LNG has the potential to support social and economic stability, while advancing zero emissions ambitions.

The GIIGNL and its members say they are fully mobilized to work with governments, LNG producers and other stakeholders to ensure a stable supply of LNG and preserve its affordability, but called for long-term contracts.

Jean Abiteboul, President of GIIGNL, assured that “the recent conflict between Russia and Ukraine is highlighting the importance of security and diversification of energy supply. The LNG market is growing rapidly and recent price increases indicate a structural imbalance between growth in demand and growth in supply On the road to a decarbonized world and in the face of looming energy shortages, cooperation between importers, governments and producers is urgently needed to accelerate investments at all stages of the supply chain of LNG and apply all possible measures to guarantee a reliable supply of LNG”.

On the eve of Gas Exporting Countries Forum (GECF) summit Held this week in Doha, the Russian Minister of Energy, Nikolai Shulginov, presented in an interview with Energy Intelligence Moscow’s opinion on the current gas crisis and outlined Russia’s priorities. He said Russia is determined to supply more gas to Europe if there are contracts with customers, and to defend gas’s role as a transition fuel and feedstock for hydrogen and chemicals. Energy relations must be beyond politics and must continue despite current geopolitical tensions, Shulginov said.

Denmark, for its part, will hold a referendum next June 1 to decide on its defense policy and the options of abandoning Russian gas supplies.