European energy prices experienced a notable decline on Monday, attributed to the surge in wind power generation driven by Storm Isha. Benchmark natural gas futures plummeted by up to 6.4%, reaching their lowest point since July. In Germany and France, intraday power prices dipped below zero for several hours, signaling an oversupply surpassing demand.
Impact of Storm Isha and Record Wind Generation
While Storm Isha disrupted travel and caused power cuts in northern Europe, the elevated wind generation provided relief to energy supplies following a recent cold spell. Wind generation in Germany is projected to set a new record, potentially surpassing the previous high recorded just before Christmas. In the UK, wind output covered around 50% of the nation’s total energy mix, with gas contributing only about 20%.
Intraday Power Prices and Market Response
Intraday power prices in Germany dropped as low as -€14.88 per megawatt hour, and in France, they reached -€15.20 per megawatt hour, as per Epex Spot SE prices. Day-ahead gas prices in the UK witnessed a 5.3% decline. Benchmark Dutch front-month gas traded 5.3% lower at €26.93 a megawatt hour.
Factors Contributing to Price Softening
Despite tensions in the Middle East, which drove a gas price rally in October, European natural gas prices have softened significantly. The milder-than-normal winter, high fuel inventories, lackluster industrial demand, and ample supplies are cited as key factors keeping energy prices in check.
Citigroup’s energy research strategists Anthony Yuen and Maggie Xueting Lin note, “Europe should get through this winter with enough natural gas in storage,” underlining the impact of favorable weather conditions and robust wind power on the region’s energy landscape.
Source：irishtimes.com
