Gas prices have risen by more than 800% since the beginning of the year, with the unprecedented rise attributed to the surge in energy demand following the pandemic and the hard Russian geopolitical poker economy.
Consumers will be asked to pay even more for electricity, but also those who use natural gas will have to put their hand deeper in their pocket after the new "explosion" of energy prices.
Gas prices in Europe have once again climbed to historic highs, even exceeding the limit of 179 euros per megawatt hour, according to reference prices in the Netherlands (Dutch TTF Gas Futures).
This is an increase of over 800% since the beginning of the year, with the unprecedented rise attributed to the surge in energy demand following the pandemic and the tough geopolitical poker played by Russia, which is one of the largest energy suppliers of the Old Continent.
On Tuesday alone, prices rose more than 20% due to the new cold winter front that is hitting Europe and the change in the flow of the Yamal-Europe pipeline that supplies gas to Germany.
Voices in the West accuse Russia of leaving Europe without sufficient gas due to political tensions with Ukraine, and speak of pressure to speed up certification of the remaining Nord Stream 2 pipeline. inactive for commercial reasons because the new government in Berlin does not give the "green light".
Moscow, however, denies any connection. "There is absolutely no connection, this is a purely commercial reason," said Kremlin spokesman Dmitry Peshkov.
Russia says the flow has changed to fulfill Poland's gas supply contracts. In any case, Gazprom is expected to keep gas supplies to underground in Germany and Austria at significantly lower levels than in previous years, despite public statements by Russian President Vladimir Putin that the company would increase supplies. .
Analysts told the Financial Times that the drop in supply on the Yamal line could be explained by the unusually low temperatures, which have reached minus 25 degrees Celsius in western Russia and close to minus 50 degrees Celsius in eastern Siberia. As they say, the cold may limit Gazprom's export capacity to some extent or Moscow may want to keep its domestic reserves high.
The impact
In any case, the rally of gas prices has a direct impact on the cost of electricity, since for its production is mostly used this fuel.
To make it even more understandable, in the energy mix (natural gas, hydroelectric, RES and imports) used today to generate electricity, the predominant fuel with 52,68% is the very expensive natural gas.
Cheap RES, due to apnea and cloudiness, correspond to only 11,02% of the mixture, while the also cheap hydroelectric ones cover 15,27% of the mixture, resulting in the average wholesale electricity price being high.
Thus, wholesale electricity prices in turn run… with broken brakes, reaching historic and unprecedented levels. On Tuesday, in fact, the average wholesale price of electricity not only broke the barrier of 400 euros, but locked in 415,94 euros per megawatt hour.
From the beginning of the year the increase exceeds 690%. The new high price in the wholesale market has resulted in the electricity suppliers today buying the quantities of electricity they need for their customers more expensive by 690% from the beginning of the year and by 21,5% compared to yesterday.
In fact, the highest price of transactions for today is at astronomical levels, at 542,5 euros / MWh, with the lowest being at 296,55 euros / MWh. Dramatic developments show the continuation of the rally of price increases in electricity and gas bills with huge burdens on households and businesses.