Record electricity prices across Europe with maximum gas

Differently on the scene are Spain and Portugal (Dutch TTF), thanks to the gas price ceiling in the electricity market and low dependence on Russia, which has led to the separation of the national gas market (Mibgas) from the European reference. The difference in fuel prices in both markets was around 50% this Tuesday. Meanwhile, the price of electricity (tender and compensation cost) this Wednesday, 236.14 euros per megawatt hour in Spain, half of what the main European countries flagged.

Separate mention deserves the Baltic states. Estonia, Latvia and Lithuania will reach 4,000 euros per megawatt hour between 5 and 6 pm, according to European regulations, this is the maximum possible price. According to Enerjoin consultant Carlos Martín Graña, this is explained by the fact that these countries “do not have enough energy in the proposals to meet the demand”. It should also be noted that these countries are more exposed to Russia. the electricity grid works in sync with the Russian and Belarus. The daily average will be 682.05; 823.98 and 823.98 Euros per megawatt hour, respectively.

This is a priori and within a month unless there is any change. A new maximum price of 5,000 euros per megawatt-hour will be set for the whole of Europe. European regulations say that if the market price exceeds 60% of the set maximum (in this case, EUR 4,000 per megawatt-hour), “at least one market hour (hour) per day in an individual auction zone or several auctions”. This maximum price must be changed in Europe. This happened for the first time in Europe on Monday, April 4, when the electricity price in the French wholesale market reached the then-current limit of EUR 3,000 per megawatt-hour between 7 a.m. and 9 a.m. Then the limit increased from 3,000 to 4,000 euros per megawatt-hour as of May 10. And now the same must be done, to set a maximum price of 5,000 euros per megawatt-hour within five weeks (September 20).

winter prices

This generalized situation in Europe, more pressure on energy markets It is added to temporary situations that take a certain permanence, such as the reduction of nuclear production in France due to the shutdown of half of its power plants and, as a result, low hydropower generation in many countries. drought engulfing almost the entire continent. Thus, despite the gas price hitting daily highs – marking 199 euros per megawatt hour on March 7 – the intraday price is still a long way from the initial peak of 335 euros per megawatt hour. March, after the invasion of Ukraine.

The biggest fear right now is what will happen in Europe in winter in terms of supply and prices, because one thing is linked to the other. The electricity price for the last quarter of this year in Germany or France is not at all encouraging, reaching figures between 500 euros per megawatt hour in the first case and 1,000 euros per megawatt hour in the second case. to the futures market. This is the ‘place’ where electricity producers and investors exchange electricity for electricity. to deliver within a specified time at a predetermined priceso they determine today the price they believe this supply will have in a given period of time.

Does this mean that the prices set by the futures market will be met? “If there’s enough energy, it won’t be that expensive. In the end, if everything is more convenient (lower temperature, uninterrupted flow from Russia, etc.), prices will automatically fall,” explains Carlos Martín Graña. “After all, markets for any ‘commodity’ (raw materials) are financial and triggered by the fear of not having energy. The question is not whether the ‘commodity’ has this or that value, but the fear of not having more,” Add. Francisco Valverde, expert and advisor to Menta Energía, even adds the possibility of establishing a mechanism to remove gas from Europe’s wholesale electricity market. European countries are not as exposed to market prices as Spain“it will eventually have repercussions”.