(Image source: Imagoeconomica)
New record for the price of gas
Gas prices in Europe have spiked over the past weekcoming to touch i 251 euros per megawatt hour, exacerbating pressure on industry and driving up the price of goods further. German producer price data showed the effects of rising energy prices for consumers, with prices rising by 37.2% in July compared to the same month a year earlier, an unprecedented increase. This is mainly due to the increased price of natural gas by 164% over the previous year, according to the German statistical agency.
On Friday morning the price was around 237 euros per megawatt hour. A year ago, gas was trading at around 50 euros per megawatt hour. Having remained stable at around € 200 per megawatt hour for the first two weeks of August, the latest hike brings prices to a level that was only briefly surpassed in early March, when prices peaked by more than 300 euros per megawatt hour shortly after the start of the Russian invasion of Ukraine. Germany and other countries that depend on low-cost Russian gas are urgently looking for alternatives, but companies are paying higher prices for gas from elsewhere, which is gradually affecting household bills, prices and production. industrial.
How the price of gas is determined
The price of gas is determined, as regards Italy, on the TTF (Title Transfer Facility) based in Amsterdam. Through this platform, gas is traded between the largest operators and traders in the sector, producers and suppliers, who respectively sell and buy natural gas. The headquarters of TTF is located in the Netherlands, a central and strategic hub for the European market that allows the transfer of gas between the largest countries such as France, Germany, Norway, Italy and Great Britain, as the Selectra experts explain.
The price of gas is obviously closely linked to economic conditions. For example, in September 2020, as the world slowly began to recover from the pandemic tragedy, the cost was 13 euros per Mw / h. Then, as the economic context started convulsively, with problems on supply chains and logistics, the price of gas began to rise, albeit at levels very far from the current ones. But from April to September 2021 the cost has tripled, going from 20 to 60 euros per Mw / h. By December 2021, well before Russia attacked Ukraine, the cost had skyrocketed to over € 110. Then the war further worsened the situation, also because the sanctions that impose a stop on Moscow gas had a double effect: penalizing Putin, but also producing a race to the rise in prices given that in 2021 Europe was importing 45% of its gas needs from Russia, ie 380 million cubic meters.
Another enemy of the price of gas is drought. In fact, fuel is also transported by barges, but the lowering of water levels makes the circulation of boats more complex and uneconomical for companies. And the water is also used for the nuclear power plants, which are in France, and for the coal-fired ones that still operate there Germany and Italy. Finally, the extreme heat of this summer also increased consumption and reduced storage. A kind of perfect storm that is now making itself felt. Gazprom for its part, it speaks of a price that could easily exceed 300 euros per Mw / h, also because everything will depend on what kind of winter awaits us: mild like that of 2021? Or very rigid? The climate will also affect heavily.
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