August 23, 2024 – Natural gas prices in Europe have returned to normal and could fall even further. The share of renewable energies in the EU continues to rise and is increasingly supplying consumers and industry with cheap or even free electricity. And will one of the main arguments of the EU steel lobby soon come to an end?
In this stainless steel espresso
Natural gas prices fall: supply remains stable
After 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 had initially risen by over 30 percent in recent days as market participants feared 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 serve as a replacement.
Renewable energies lead to attractive electricity prices
A high supply of wind and solar energy led to temporarily negative electricity prices on several European markets last Tuesday. The German day-ahead auction in particular recorded six hours of prices below zero, supported by an average wind power generation of 22.7 gigawatts – the highest level in four months.
Strength and flexibility in the electricity market
This event shows the growing strength and flexibility of renewable energies 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 reduce CO2 emissions, but also enables cost-efficient energy options.
Comment: Is the EU steel lobby’s main argument soon coming to an end?
One of the main arguments used by the European steel lobby for more market protection and subsidies in recent years has been the alleged extreme increase in energy costs in Europe. BF-BOF and EAF producers will be equally pleased with the rising natural gas prices and the increasing possibility of having access to free energy.
After all, lobbyists are usually at the forefront when it comes to gifts from the public. And with an ever-increasing share of energy from renewable sources, the number of days with very cheap or even free electricity will also increase significantly.
Finally liberalise the rampant EU market protection
The argument that energy costs in Europe are too high could soon lose a lot of weight and the market protection measures of the Brussels Commission could finally be lifted. After all, it is precisely these protective measures and punitive tariffs that have encouraged 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 is time for Brussels to focus on SMEs again. The summer break is over, Ms von der Leyen. Finally start implementing your promises for SMEs.”
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