Headlines:
- Gas and Electricity Wholesale prices are lower
- EU Gas Storage levels are 56% full
- Large numbers of LNG shipments to Europe
Energy Overview
Since our last Energy Report, Gas and Electricity Year Ahead Wholesale prices are lower.
During the warmer months the EU’s focus will be to fill their Gas Storage, which has a target of 90% full by November 2023. It has been a healthy 56% full for the last month. Large numbers of LNG shipments are still being delivered to the UK and with Germany now being able to receive LNG cargoes, this helps reduce one price pressure created by the reduced flows from Russia. There remains the possibility that should Asia offer a higher price than Europe, that some LNG may be diverted to the likes of China, despite receiving more piped Russian Gas.
Wind has contributed 24% of supplies so far this month compared to 25% in March. Gas power generation is down slightly at 34% compared to 36%. We are still seeing high volumes of Electricity being imported from the continent via the Interconnectors, currently at 12%, although French industrial action is delaying maintenance work on their Nuclear reactors, which could have an impact on future flows. For much of 2022 we exported more Electricity than we imported which added a price pressure.
There appears to be little price direction at the moment, following the large decreases over the last four months. The supply position is comfortable but there is continued concern that an event which has not been factored into costs, could once again see increases. We saw this with the recent cold spell, helping to create upward price movement. Prices are showing a premium on those seen in 2020 and early 2021, but with the possibility of an exaggerated market reaction, we would advise discussing your options for contracts ending in 2023 with Indigo Swan.
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