European prices for natural gas and electricity are rising to record highs as concerns are growing about the energy supply for next winter. The monthly forward contract for gas traded in the Netherlands, which is considered a European standard, briefly peaked on Wednesday morning at 155 euros per megawatt hour (MWh). By the evening the price fluctuated around 110 euros.
Since Tuesday, the gas price has always been above 100 euros per MWh, converted 1 euros per cubic meter. That is unprecedented. Over the past decade, the price has fluctuated between 10 and 30 cents per cubic meter.
Electricity prices are also breaking records. A kilowatt hour of electricity cost more than 30 cents on the wholesale market on Wednesday. That is eight times as many as a year ago.
Due to the economic recovery from the corona crisis, the demand for energy has risen sharply. This affects both inflation and industrial production. Some factories in Europe have already reduced production due to high energy prices. The Dutch underground gas reserves have never been so empty at the start of the heating season as this year. The fill rate was 59 percent on Wednesday, while 80 percent is considered a safe minimum.
Fewer new factories
According to the Center for Strategic Studies in The Hague (HCSS), there are several reasons for the increased prices. That is what the HCSS says in a new study on gas in the Netherlands. For example, there are fewer new factories for liquefied gas (LNG) and existing factories for LNG are used less. Last winter was also relatively cold, which means that there are fewer energy supplies.
These smaller reserves are also partly caused by the low wind speeds, which means that less wind energy is generated. The HCSS also says that Russia has become more reluctant to export gas to Europe, which surprised Europe.
The Ministry of Economic Affairs is currently discussing developments in the gas market. Energy suppliers, the Netherlands Gas Storage Association and Gasunie, which is responsible for the gas infrastructure in the Netherlands, are among those involved in these discussions. According to the department, households will not run into problems because the storage facilities with so-called low-calorific gas are well filled. The industry works with high-calorific gas. These storage facilities are actually considerably less well filled due to the high gas price.
FME, the entrepreneurs’ organization of the technological industry, held a demonstration at the House of Representatives on Wednesday, together with unions FNV and CNV, about the problems companies face due to high gas and electricity prices. (ANP/NRC)
A version of this article also appeared in NRC in the morning of October 7, 2021
European prices for natural gas and electricity are rising to record highs as concerns are growing about the energy supply for next winter. The monthly forward contract for gas traded in the Netherlands, which is considered a European standard, briefly peaked on Wednesday morning at 155 euros per megawatt hour (MWh). By the evening the price fluctuated around 110 euros.
Since Tuesday, the gas price has always been above 100 euros per MWh, converted 1 euros per cubic meter. That is unprecedented. Over the past decade, the price has fluctuated between 10 and 30 cents per cubic meter.
Electricity prices are also breaking records. A kilowatt hour of electricity cost more than 30 cents on the wholesale market on Wednesday. That is eight times as many as a year ago.
Due to the economic recovery from the corona crisis, the demand for energy has risen sharply. This affects both inflation and industrial production. Some factories in Europe have already reduced production due to high energy prices. The Dutch underground gas reserves have never been so empty at the start of the heating season as this year. The fill rate was 59 percent on Wednesday, while 80 percent is considered a safe minimum.
Fewer new factories
According to the Center for Strategic Studies in The Hague (HCSS), there are several reasons for the increased prices. That is what the HCSS says in a new study on gas in the Netherlands. For example, there are fewer new factories for liquefied gas (LNG) and existing factories for LNG are used less. Last winter was also relatively cold, which means that there are fewer energy supplies.
These smaller reserves are also partly caused by the low wind speeds, which means that less wind energy is generated. The HCSS also says that Russia has become more reluctant to export gas to Europe, which surprised Europe.
The Ministry of Economic Affairs is currently discussing developments in the gas market. Energy suppliers, the Netherlands Gas Storage Association and Gasunie, which is responsible for the gas infrastructure in the Netherlands, are among those involved in these discussions. According to the department, households will not run into problems because the storage facilities with so-called low-calorific gas are well filled. The industry works with high-calorific gas. These storage facilities are actually considerably less well filled due to the high gas price.
FME, the entrepreneurs’ organization of the technological industry, held a demonstration at the House of Representatives on Wednesday, together with unions FNV and CNV, about the problems companies face due to high gas and electricity prices. (ANP/NRC)
A version of this article also appeared in NRC in the morning of October 7, 2021
European prices for natural gas and electricity are rising to record highs as concerns are growing about the energy supply for next winter. The monthly forward contract for gas traded in the Netherlands, which is considered a European standard, briefly peaked on Wednesday morning at 155 euros per megawatt hour (MWh). By the evening the price fluctuated around 110 euros.
Since Tuesday, the gas price has always been above 100 euros per MWh, converted 1 euros per cubic meter. That is unprecedented. Over the past decade, the price has fluctuated between 10 and 30 cents per cubic meter.
Electricity prices are also breaking records. A kilowatt hour of electricity cost more than 30 cents on the wholesale market on Wednesday. That is eight times as many as a year ago.
Due to the economic recovery from the corona crisis, the demand for energy has risen sharply. This affects both inflation and industrial production. Some factories in Europe have already reduced production due to high energy prices. The Dutch underground gas reserves have never been so empty at the start of the heating season as this year. The fill rate was 59 percent on Wednesday, while 80 percent is considered a safe minimum.
Fewer new factories
According to the Center for Strategic Studies in The Hague (HCSS), there are several reasons for the increased prices. That is what the HCSS says in a new study on gas in the Netherlands. For example, there are fewer new factories for liquefied gas (LNG) and existing factories for LNG are used less. Last winter was also relatively cold, which means that there are fewer energy supplies.
These smaller reserves are also partly caused by the low wind speeds, which means that less wind energy is generated. The HCSS also says that Russia has become more reluctant to export gas to Europe, which surprised Europe.
The Ministry of Economic Affairs is currently discussing developments in the gas market. Energy suppliers, the Netherlands Gas Storage Association and Gasunie, which is responsible for the gas infrastructure in the Netherlands, are among those involved in these discussions. According to the department, households will not run into problems because the storage facilities with so-called low-calorific gas are well filled. The industry works with high-calorific gas. These storage facilities are actually considerably less well filled due to the high gas price.
FME, the entrepreneurs’ organization of the technological industry, held a demonstration at the House of Representatives on Wednesday, together with unions FNV and CNV, about the problems companies face due to high gas and electricity prices. (ANP/NRC)
A version of this article also appeared in NRC in the morning of October 7, 2021
European prices for natural gas and electricity are rising to record highs as concerns are growing about the energy supply for next winter. The monthly forward contract for gas traded in the Netherlands, which is considered a European standard, briefly peaked on Wednesday morning at 155 euros per megawatt hour (MWh). By the evening the price fluctuated around 110 euros.
Since Tuesday, the gas price has always been above 100 euros per MWh, converted 1 euros per cubic meter. That is unprecedented. Over the past decade, the price has fluctuated between 10 and 30 cents per cubic meter.
Electricity prices are also breaking records. A kilowatt hour of electricity cost more than 30 cents on the wholesale market on Wednesday. That is eight times as many as a year ago.
Due to the economic recovery from the corona crisis, the demand for energy has risen sharply. This affects both inflation and industrial production. Some factories in Europe have already reduced production due to high energy prices. The Dutch underground gas reserves have never been so empty at the start of the heating season as this year. The fill rate was 59 percent on Wednesday, while 80 percent is considered a safe minimum.
Fewer new factories
According to the Center for Strategic Studies in The Hague (HCSS), there are several reasons for the increased prices. That is what the HCSS says in a new study on gas in the Netherlands. For example, there are fewer new factories for liquefied gas (LNG) and existing factories for LNG are used less. Last winter was also relatively cold, which means that there are fewer energy supplies.
These smaller reserves are also partly caused by the low wind speeds, which means that less wind energy is generated. The HCSS also says that Russia has become more reluctant to export gas to Europe, which surprised Europe.
The Ministry of Economic Affairs is currently discussing developments in the gas market. Energy suppliers, the Netherlands Gas Storage Association and Gasunie, which is responsible for the gas infrastructure in the Netherlands, are among those involved in these discussions. According to the department, households will not run into problems because the storage facilities with so-called low-calorific gas are well filled. The industry works with high-calorific gas. These storage facilities are actually considerably less well filled due to the high gas price.
FME, the entrepreneurs’ organization of the technological industry, held a demonstration at the House of Representatives on Wednesday, together with unions FNV and CNV, about the problems companies face due to high gas and electricity prices. (ANP/NRC)
A version of this article also appeared in NRC in the morning of October 7, 2021