Europe’s households and businesses need to learn to live with high gas and electricity prices, according to estimates in the European Commission’s gas and electricity market report for the third quarter of 2021, which brought consumption electricity in Europe at pre-pandemic levels (3% increase over 2020).
Analyzing the gas prices based on the futures prices of the Dutch TTF node, the Commission report states that “standard decade prices (in the range of 15-25 euros / MWh) are unlikely to return in the next two or three years”, as mentions a report by Chryssa Liaggou in Kathimerini.
As for the retail gas prices, he estimates that a further increase is expected in the coming months, as the high prices of the fourth quarter of 2021 have not been passed on to consumption. Electricity prices, which are affected by gas prices and CO2 prices, the average price of which in the third quarter stood at 57 euros / ton, recording an annual increase of 169%.
The average wholesale electricity price in Europe stood at 105 euros / MWh, recording an annual increase of 211%. The most expensive market in the third quarter was Ireland with an average price of 157 euros / MWh, second the United Kingdom with a price of 152 euros / MWh and third Italy with a price of 125 euros / MWh. It is followed by Greece with a price of 119.4 euros / MWh and the countries of the Iberian Peninsula with a little over 118 euros / MWh.
The data of the report also reflect the weaknesses of the Greek electrical system, which appears extremely vulnerable to fluctuations in imported gas, due on the one hand to the marginal adequacy and on the other hand to the expensive fuel mixture. Greece, according to the report, is the only country in the EU. in which electricity production from natural gas increased by 24%, while in all other countries it decreased to compensate for the high costs and even in some with impressive percentages, such as in the Netherlands by 49%, in France by 46%, in Germany by 30% and in Spain by 21%. It is also the country with the highest increase in lignite production, 53% year-on-year, among the six countries that increased coal production.
The data certify the problems of adequacy of the Greek electricity market and its high dependence on imported natural gas, which in times of crisis, when weather conditions do not favor the production of RES, make lignite production necessary, which, however, due to the forward PPC de-ligation program and the consequent devaluation of the units, is becoming more and more expensive. The increase in electricity demand in Greece in the third quarter by 13.4% (second largest pan-European) “required virtually all sources of production to contribute to the electricity mix”, notes the Commission report commenting on the increase in natural gas for electricity generation by 24% and highlighting competency problems.
The rise in gas prices, as reported in the report, has reversed the transition from coal to natural gas, as many countries have partially offset their gas production with coal and lignite, whose total production has increased by 15%. On the contrary, the production from natural gas decreased by 18%, as a result of which the environmental footprint in the electricity sector increased by 1%. The share of renewable energy sources still reached 37%, again surpassing fossil fuels (35%). Germany offset the decline in gas production with an increase in coal and lignite to a lesser extent in nuclear, while a significant increase in hydroelectric production. Similarly, in France the increase in energy production by 17%, as the production of natural gas decreased, was offset by the rise in nuclear energy and hydroelectric power.
Lignite
Greece does not have the luxury of compensating for the expensive production of natural gas with other sources, as in order to meet the growing demand, all available units will have to operate. The Greek system also failed to take advantage of the use of lignite, the production of which in other countries became more economical than that of natural gas, since the operating costs of PPC units remained high, resulting in their devaluation in view of the de-ligation program. . In contrast, countries such as Germany, which have planned to withdraw their coal plants by 2038, have taken full advantage of the conjunctural advantage of “cheap” coal.
MONEY REVIEW
Follow Skai.gr on Google News
and be the first to know all the news
.
