Wednesday 05 October 2022

Gas prices keep setting new records, NL tops European league table

Photo: Depositphotos.com

Gas prices have risen again this week to a record-breaking €600 per megawatt hour, compared to €34 two years ago.

According to the FD, the war in Ukraine and a reduction in the supply of gas from Russia are to blame. The Russian state-owned supplier Gazprom announced this week it will shut down the Nordstream 1 pipeline for maintenance, cutting availability even further.

The pipeline, which supplies more than 40% of gas to the EU, has been operating at a reduced capacity for months in which experts see as an attempt by Moscow to punish Germany for supporting Ukraine.

‘Unpredictable developments’

Energy company Agro Energy is pessimistic about future developments. ‘Fears of gas shortages in the winter could also push prices up further,’ the company wrote in a recent report.

Contributing to the problem are the current high coal prices. Low water levels in Germany have left barges unable to transport coal to ports in Antwerp and Rotterdam. Prices for a ton of coal have increased fourfold in the past two weeks.

Agro Energy writes that these ‘unpredictable developments’ make forecasting energy prices difficult.

Gas prices in the Netherlands rose to the highest in Europe in July. Other EU countries have a far greater proportion of coal, nuclear or hydro-electric power in their energy mix and some, such as France, have price caps.

The Netherlands has cut value added tax on energy bills and given compensation deals to low-income families.

Heading into winter

The Ministry of Economic Affairs and Climate reported last week that the country is on track to meet its target of filiing its gas reserves to 80% capacity by November 1.

But higher prices may hold them back from achieving this goal. Wholesaler GasTerra has stopped storing gas at the Norg facility in Drenthe because prices are too high. The company wants the government to increase support.

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