Wholesale energy prices ease today as the wind blows
Gas prices have slumped today (19/09/2023) amid continued LNG (liquid gas) exports from Australia and strong wind conditions.
Contract prices posted losses with the largest seen towards the near-curve driven in the main by uninterrupted LNG exports from Australia. The long-anticipated strike action has seemingly had little impact to Australia’s LNG exporting capabilities as Laden vessels continue to leave terminals, suppressing fears of increased competition from Asian markets for European LNG imports.
The price eased as well based on bearish weather fundamentals. According to data from National Grid, wind-generated power saw a huge increase of around 700% on yesterday (Monday), subsequently reducing the need for gas-fired generation which fell by circa 10GW (gigawatts) day-on-day.
This morning, natural gas price trading has opened and is relatively unchanged. The great news for the week is the forecast for more blustery conditions which will really help ease the demand for gas for power generation.
Given we reported yesterday that the industry is concerned about the viability of wind generation, this week is proving that when it blows, having off shore wind capability really helps reduce the UK’s demand for gas fired generation.
It’s clear that wind, nuclear, hydro and solar are going to be the UK’s future renewable electricity generation mix in our drive to become carbon neutral by 2045. It just remains to be seen which area/s the government will focus on to meet the 2045 target.
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