Electricity prices are spiking
Greece’s wholesale market now the most expensive in the EU as use of natural gas rises
Even with a slight drop Monday, Greece’s wholesale electricity market remained the most expensive in the European Union.
The wholesale electricity price stood at €147.10 per megawatt-hour, down 5% from Sunday’s €154.63/MWh. Next were Bulgaria and Romania, two countries with a highly integrated grid at €145.58, while in most western and northern EU countries prices ranged between €100 and €123.
The reason for the inflated price is the big contribution of natural gas (over 42% Monday) to the source mix and the relatively low one of renewable sources (21.56% Sunday and 24.40% Monday).
The news from the natural gas front is not good: a strike at Chevron’s liquefied natural gas (LNG) storage facilities in Australia that will start on September 7 has affected the market. At the Netherlands’ TTF gas futures market, the price of gas rose 8% to €37.57/MWh, with December futures at €54.30/MWh.
Natural gas is not the only contributing factor to high wholesale electricity prices. Weather conditions in Central Europe (high temperatures and little wind, which affects wind turbine production) started putting upward pressure on prices last week. The average price from August 21-27, at €137.61/MWh, was a 25-week high and 45.61% higher than the previous week’s average. There were also wild fluctuations in the extreme prices last week, from a high of €356.45/MWh to a low of €44.79/MWh.
According to an analysis by the Institute of Energy for South-East Europe (IENE), total electricity demand last week was 1.19 terawatt-hours, 13% over the previous week, ranging from 155.248 MWh on Sunday, August 27 to 179.763 MWh on Thursday.
On a weekly basis, natural gas was the main source of electricity at 45%, rising from 36% from August 14-20. Renewables contributed 43%, down from 50%, hydroelectric energy 8% (unchanged from the previous week), lignite, or brown coal, 2%, down from 6%, and electricity imports a net 2%, whereas the balance was zero the previous week.
To keep retail prices low, if the present trend continues, more government aid will be required, besides retailers having to cut down on their profit margins.
