Just a few days after the Russian invasion of Ukraine, Europe is preparing for a winter of energy instability, especially in the economies that are most dependent on gas, such as Germany, Italy or the Baltic countries, where prices have skyrocketed in recent months.
In markets stressed since last year due to the sudden recovery in activity after the pandemic and the rise in the price of raw materials, Moscow’s position has aggravated the situation in the Old Continent, in which the megawatt hour (MWh) of electricity It has stood, at times, at 4,000 euros this week.
Europe is suffering the collateral damage of a conflict in which Brussels has adopted a clear critical stance towards Russia, with the partial embargo on oil from this country, and the gradual reduction of its energy dependence on the former Soviet power.
However, in Spain, the approval of the "Iberian exception" Together with Portugal to cap the price of gas for electricity generation, added to its low dependence on Russian supplies, they place it in a more favorable situation.
ELECTRICITY, SHOWERED THROUGHOUT EUROPE
The effects of the war in Ukraine are being felt especially in the electricity market, linked to the evolution of gas itself, as it is used to produce electricity, with historically high levels in the main economies of the Twenty-seven.
Both in Germany, where this week the price of electricity reached a new record, and in France and Italy, in recent weeks they have generally exceeded 500 euros/MWh.
A similar problem occurs in the Baltic countries -Estonia, Latvia and Lithuania- in which the MWh shot up to 4,000 euros last Wednesday, according to the Nord Pool records consulted by Efe.
THE "IBERIAN EXCEPTION" ATTENUATE THE EFFECT
Only Spain and Portugal remain at relatively low levels in the current context, standing at around 250 euros/MWh thanks to the "Iberian exception"the agreement reached by both countries with the EU, which will limit the price of gas until mid-2023.
For example, electricity will mark an average price of 287.05 euros/MWh this Saturday in Spain, a value that is 47% below the historical maximum registered on March 8 (544.98 euros/MWh), almost two weeks after the start of the invasion of Ukraine.
GAS REACHES RECORD LEVELS
Behind these high prices is the rise in the price of natural gas – a raw material used to generate electricity in combined cycle plants and whose main exporter to the EU has been Russia – at record levels during the summer.
Specifically, the price of TTF gas for delivery in September in the Dutch market, a benchmark in Europe, set a new record yesterday of 247.6 euros/MWh, after the Russian state-owned company Gazprom announced a new maintenance shutdown in the Nord Stream gas pipeline through which it pumps gas to Germany.
This week’s prices are higher than the previous record, reached on March 7, and presage a difficult winter due to the high demand both from Europe, which aspires to fill its reserves to a minimum of 80% before the winter begins. like from Asia.
On the contrary, the Iberian Gas Market (Mibgas) remains below, with a price that has exceeded 160 euros/MWh this week and that is used to calculate the adjustment to be paid after the gas cap, still set at 40 euros/MWh, to compensate the plants that use this material.
GASOLINE AND DIESEL GIVE A BREAKTHROUGH
As for fuel, which set records throughout Europe when the conflict began, forcing different governments to establish tax cuts and direct aid, its escalation has slowed in recent months.
Thus, gasoline is currently paid in Europe at an average of 1,774 euros per liter, practically at the same price as when the war began (1.75 euros), while diesel, which stands at 1,804 euros, is 11% more expensive.
The fall in fuels, which has been down for eight weeks, is driven by the price of oil, with a downward trend due to a possible economic slowdown, and which stands at over 95 dollars per barrel in the case of Brent, from reference in Europe.
However, the fear that the supply will be reduced once the embargoes on Russian oil begin to come into force has caused a slight rebound in recent days, to which a slight increase in demand has been added.