The escalation of the war between Ukraine and Russia further pushed up the price of gas in Europe on Thursday.
On the main Dutch futures market, the price of a megawatt hour of gas now stands at 48 euros, the highest level since November 2023.
Gas prices have been rising for several weeks. Europe is currently going through a cold period with weak wind, forcing gas-fired power plants to operate more intensively. The escalation of the Russian-Ukrainian conflict also raises concerns. Despite the war, Russia continues to supply gas via pipelines to several European countries via Ukraine.
The trend continues
Last week, Damien Ernst, professor at the University of Liège, gave us his analysis on the increase in electricity and gas prices. The specialist confirmed that current climatic conditions played a role in this increase. “We have had particularly unfavorable weather conditions since mid-October. We have no wind, so little electricity produced by wind turbines. And a relatively cold climate, therefore a heating load which consumes a lot of gas. We still have gas supply problems, so we have an imbalance between supply and demand. This causes this price explosion“, he declared.
Could electricity prices follow? Once again, it is the climatic conditions which will decide. “Electricity, when you don't have wind, is largely generated by gas plants. So the price of electricity depends enormously on the price of gas. This means that the gas and electricity bill for households and businesses increases very sharply.“, explained Damien Ernst before expressing his concerns.
“If we continue to have a climate without wind, and with significant cold, we could relive an energy crisis with gas and electricity prices approaching 70 euros per megawatt hour. We are in a very worrying scenario“.
gas price increase
