Filenews 16 May 2022
By Harry Floudopoulos
Pessimistic predictions about the timing and intensity of the energy crisis are made by the Commission in the leaked text on measures to tackle high energy prices.
As the Commission says, citing the analysis of forward contracts concluded in the energy markets, energy prices are expected to remain high for the remainder of 2022, while the same is expected to happen even at a higher intensity until the two-year period 2024 - 2025.
More specifically, natural gas prices are expected to remain at the level of €100 per megawatt hour until the end of next winter, while they are projected to de-escalate to €75 per megawatt hour until the summer of 2023 and will remain above €50 per megawatt hour until the summer of 2025.
Depending on the gas prices, electricity prices are expected to move. In any case, the Commission states that this forecast is conditional on market uncertainty due to the current geopolitical tensions and the war in Ukraine.
According to the Commission's assessment, in the short term the gradual elimination of dependence on Russian gas will lead to adjustments in demand and supply conditions as well as to price volatility. Price levels will continue to be high with the need to diversify supply sources exerting upward pressure.
At the same time, the rapid deployment of renewables and the significant energy saving/demand response measures, as presented in the REPowerEU plan, should help to limit these impacts and offer lower electricity prices in the medium term.
As far as the current situation is concerned, according to a Commission document, electricity and gas prices reached record levels in 2021 and recorded historic highs after the invasion of Ukraine in the first weeks of March 2022.
The prices of gas that historically move below €30 per megawatt hour were recently found at €100 per megawatt hour while occasionally exceeded €200 per megawatt hour. As a result, electricity prices in the wholesale market increased due to power plants using natural gas.
For example, prices in Germany, which historically are below €75 per megawatt hour, are now around €235 per megawatt hour, while occasionally they reached €400 per megawatt hour.
Source: Capital.gr
