Wholesale gas prices in Europe have continued to fall, reaching their lowest level since July 2021. The futures contract TTF on the energy exchange in the Netherlands, which is used as a reference, briefly fell below 40 euros per megawatt hour. Then it climbed slightly again to EUR 40.20.
Analysts from Energi Danmark said storage facilities in Europe were still well stocked and temperatures were mild.
The gas price had risen from autumn 2021. After the start of the Russian war of aggression against Ukraine on February 24, 2022, it continued to increase by leaps and bounds. On March 7, 2022, the TTF reached its previous high of 345 euros per megawatt hour. At the end of August, the price was almost as high, at just over 342 euros. The price has been falling since the beginning of the year – by more than 47 percent since January.
The President of the Federal Network Agency, Klaus Müller, does not expect gas prices to fall for consumers for a few months. “It will probably take another six to twelve months before the reduction in wholesale prices for gas and electricity also reaches household customers,” he told the “Rheinische Post”. “This is due to the term of the contracts and the purchasing strategy of the company.”
At the same time, Müller dampened hopes of a sharp fall in prices: “However, it will not be as cheap as in 2021,” he said. “Wholesale gas prices, which rose to over EUR 300 per megawatt in late summer, have fallen to around EUR 50. That’s way more than 2021, but the new normal,” he said. “We have to get used to higher prices, the era of cheap energy from Russia is finally over.”
Regarding the current supply situation, the head of the authority said that the gas storage facilities were 64 percent full. “Even if it should get really cold again in the next few weeks, the supply is secured thanks to the storage tanks. We did it, we can finally rule out a gas shortage for this winter.”
Müller added: “But we must not rest on our laurels. It may look different next winter.” A gas shortage in the winter of 2023/2024 cannot be ruled out. As risk factors, Müller cited very cold temperatures, insufficient savings by households and companies and the possibility “that the LNG terminals will not work as planned”. The biggest risk is the weather.
The head of the network agency warned that gas should be saved further. “If we still have well over 50 percent in German gas storage facilities on May 1, I would be happy,” he said. “The more gas there is in the storage facilities, the easier it will be for us to fill them up over the summer, even though we no longer get Russian pipeline gas.”
