Heatwaves push European gas prices close to Iran war highs

{"text":[[{"start":7,"text":"European gas prices have approached their highest levels since the start of the Iran war as Wednesday’s solar eclipse and yet another heatwave add to demand for gas-fired power generation while maintenance at a key Norwegian gasfield will take longer than planned."}],[{"start":22.65,"text":"The benchmark TTF contract briefly traded above €62 per megawatt-hour intraday on Tuesday, heading towards the €63 per MWh peak reached on July 24, which was its highest level since January 2023, according to Argus data. It fell back later in the day on Tuesday amid fresh hopes that the US and Iran could agree a peace deal. It had closed at €60.85 per MWh on Monday. "}],[{"start":50.05,"text":"Demand for gas to fuel power stations in Europe this summer has been pushed up by high demand for air conditioning and lower output from some nuclear and coal power stations as heatwaves make the temperature of the water in rivers they need for cooling too high, while in several areas levels are too low. "}],[{"start":null,"text":"

"}],[{"start":68.65,"text":"Wednesday’s solar eclipse is set to add to demand for electricity from gas-fired power stations owing to the expected loss of around 9.7 gigawatts of solar power in Europe for several hours in the evening, according to the French grid operator RTE. It will be the first total solar eclipse visible from continental Europe this century."}],[{"start":87.7,"text":"Meanwhile, Norway’s gas pipeline operator Gassco said on Monday that output at Shell’s Ormen Lange offshore gasfield would be curtailed for longer than planned because of technical problems. "}],[{"start":null,"text":""}],[{"start":99.15,"text":"It comes as global supplies of liquefied natural gas remain constrained owing to the limits on shipping through the Strait of Hormuz and Qatari production because of the Iran war, and European gas stocks are low. "}],[{"start":111.80000000000001,"text":"“In this environment, even smallish changes in the balance can have an outsized effect on prices,” said Natasha Fielding, head of generating fuel pricing at Argus. "}],[{"start":121.50000000000001,"text":"Tom Marzec-Manser, director for European gas and LNG at Wood Mackenzie, said demand for gas for electricity generation in western Europe was roughly 714 million cubic metres higher in July than would be expected in a normal year. The picture looked similar so far in August and was above the five-year average, he added. "}],[{"start":141.5,"text":"“Restricted nuclear capability is increasing the call for gas-fired generation, while demand for power is higher due to the heat,” he said."}],[{"start":149.85,"text":"Following several heatwaves this summer, temperatures are expected to be high in Europe again this week while in Britain, which trades power with Europe, the Met Office has issued an “amber” weather warning of temperatures as high as 38C in some parts of the country. Gas-fired power plants are also affected by higher temperatures. "}],[{"start":169.35,"text":"Nuclearelectrica, Romania’s state-owned power producer, warned on Tuesday that it may need to shut down the second unit of the Cernavodă nuclear power plant, more than 160km east of Bucharest, on Thursday morning because of low Danube levels. The first unit was shut on July 31. "}],[{"start":null,"text":""}],[{"start":189.35,"text":"The conditions mean power margins are tighter than usual heading into Wednesday’s eclipse. Reflecting those conditions, day-ahead electricity prices in Germany cleared at €461.17 per MWh for the 7.45pm and 8pm period on Wednesday and €402.50 per MWh for the next quarter of an hour, roughly €200 per MWh higher than for Tuesday evening, according to data from Montel Analytics. "}],[{"start":218.7,"text":"“Unlike a cloud front, a solar eclipse is highly predictable, allowing grid operators and market participants to prepare accordingly. However, day-ahead prices are already showing a clear effect,” said Vincent Thevenin, German power market expert at Montel Analytics. "}],[{"start":235.04999999999998,"text":"In Britain, the UK’s largest household energy supplier, Octopus Energy, will offer households free electricity this weekend if they use less electricity during the hours of the eclipse. "}],[{"start":247.24999999999997,"text":"“As the sun disappears, so will some of Britain’s solar generation, just as demand peaks,” said Rebecca Dibb-Simkin, chief customer officer at Octopus Energy, in a statement. "}],[{"start":258.59999999999997,"text":"“By shifting everyday tasks like the washing machine or dishwasher until later, households can help reduce the need for gas power stations – and earn rewards for doing their bit.”"}],[{"start":275.7,"text":""}]],"url":"https://audio.ftcn.net.cn/album/a_1786497124_2041.mp3"}