23 August 2024 – Natural gas prices in Europe have normalised again and could fall even further. The share of renewable energies in the EU continues to increase and is increasingly providing consumers and industry with cheap or even free electricity. And does this mean that one of the EU steel lobby’s main arguments will soon come to an end?
Natural gas prices ease: supply remains stable
Following a brief rise, natural gas prices have fallen again and, according to analysts, could fall even further. On the Dutch futures exchange TTF, the price of natural gas initially rose by over 30 per cent in the last few days as market players were concerned about fighting near the Russian compressor station Sudscha. Despite these challenges, natural gas continues to flow without restrictions.
Transmission is expected to remain stable until the natural gas transit agreement between Ukraine and Russia expires in January 2025. Even in the unlikely event of a pipeline closure, there are alternatives: increased natural gas exports from Algeria or a pipeline from Turkey could step in.
Renewable energies lead to attractive electricity prices
Last Tuesday, a high supply of wind and solar energy led to temporarily negative electricity prices on several European markets. The German day-ahead auction in particular recorded six hours with prices below zero, supported by an average wind power generation of 22.7 gigawatts – the highest level in four months.
Growing strength and flexibility in the electricity market
This event demonstrates the growing strength and flexibility of renewable energy in the electricity market. Consumers and companies with flexible electricity tariffs or their own storage facilities can benefit from the low or negative prices by shifting their consumption to these times. The expansion of wind and solar energy not only helps to reduce CO2 emissions, but also enables cost-efficient energy options.
Opinion: Important main argument of the EU steel lobby soon to end?
One of the main arguments of the European steel lobby in favour of more market protection and subsidies in recent years has been the alleged extreme rise in energy costs in Europe. BF–BOF and EAF producers will be equally pleased that natural gas prices and the increasing possibility of being able to fall back on free energy.
After all, lobbyists are normally at the forefront when it comes to gifts from the public. And with an ever-increasing amount of energy from renewable sources, the number of days with very cheap or even free electricity will also increase significantly.
Finally liberalise encroaching EU market protection
The argument that energy costs are too high in Europe could soon lose much of its influence and the Commission’s market protection measures in Brussels could finally be lifted. After all, it is precisely these protective measures and punitive tariffs that have favoured inflation and recession in Europe in recent years and cost hundreds of thousands of jobs in the manufacturing industry.
Thorsten Gerber, CEO of the Gerber Group, said today: ‘It’s time for Brussels to start focussing on SMEs again. The summer break is over, Ms von der Leyen. Finally start realising your promises regarding small and medium-sized enterprises.’
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