At the beginning of the year, gas prices in Europe maintained the downward trend of the last trading days, thanks to unusually mild winter temperatures. On Monday, the TTF futures contract for Dutch natural gas started trading at EUR 70.30 per megawatt hour. European natural gas was last this cheap in February 2022, before the outbreak of war in Ukraine.
At the beginning of trading, the price of gas rose slightly again and megawatt hours were trading at 73 euros in the morning. Since the beginning of December, the price of the TTF futures contract has almost halved. The record was reached last summer at 345 euros per megawatt-hour. At that time, an interruption in the supply of natural gas from Russia caused prices to rise rapidly.
mild winter
The main reason for the drop in gas prices is still the comparatively mild winter temperatures, which are lowering consumption. At the turn of the year in Germany there were regional temperatures of over 20 degrees. The German weather service recorded the hottest New Year’s Eve since meteorological records began. In addition, significantly more energy has recently been generated from wind energy, which reduces the consumption of gas to generate electricity.
Thanks to the recent very mild winter, natural gas is still being stored in Germany. According to the latest data from the European storage association GIE, the fill level across all German storage facilities was 90.12% as of December 31st. Gas reserves rose for the 11th straight day after falling for several weeks.
In Austria, too, the level of gas storage is increasing as a result of exceptionally high temperatures. For eleven days, less gas was consumed than was supplied, which is why storage levels are increasing. The current low consumption of gas is also due to the good production of electricity from wind and solar energy, as explained on Monday by the Minister of Climate and Energy of Austria, Leonore Gewessler (Greens). Gas storage level increased from 85 to 87% from 21st to 31st December.
records
Record January temperatures were measured across Europe on New Year’s Day. In Warsaw, Poland, 18.9 degrees were measured, beating the previous January record by more than 5 degrees Celsius. In Bilbao, Spain, the thermometer scored 24.9 degrees on the first day of the year. What should be a wake-up call in the climate crisis is good news in the energy crisis.
“The less gasoline we consume now, the more we have left in stores and the better for next winter,” said Gewessler. It is still true that “the cheapest energy is the one we don’t use”.