L’inflation tinged with verde. The reduction of carbone and the increase of gas to meet global energy needs they pushed i energy prices. A trend that has prompted some governments, including the Italian one, to intervene with public funding to prevent the increases linked to sustainability from directly impacting citizens. A Credit Suisse report clearly detailed what is the situation that has arisen internationally on the so-called greenflation.
The demands of China
The growing request of electricity in China has been increasingly satisfied by the generation of energy a gas In the 2021, as the decline in coal supplies reduced China’s share of coal-fired power generation and low hydropower levels weighed on China’s hydroelectric power generation. As a result, strong gas demand from China recently drove LNG (liquefied natural gas) demand and prices in Asia.
Gas prices skyrocketing
Since the loads of GNL hijacked in Asia, supplies of european gas have been affected by two effects on theoffering: lower imports of LNG and lower pipeline supplies from Russia. The politically very controversial Nord Stream 2 pipeline from Russia to Germany has finally been completed but is still awaiting certification before it can supply gas to Europe. The decline in European gas inventories triggered the recent rally in the price of gas in Europe before the start of the winter season. Since the beginning of the year (YTD), the European reference price (Dutch TTF index [Title Transfer Facility]) increased fivefold, and the UK price quadrupled in 2021.
Costs soaring in Europe
A combination between a strong rise in the gas and minor speed of the wind has significantly changed the mix of fuels in the generation of energy EU In the 2021. While German and EU energy demand recorded a strong recovery from last year’s COVID-19 recessions of 5.1% and 5.7% YoY respectively, slow winds across Europe have reduced electricity generation. from the wind of 20% in Germany and 6% at the European Union level. With lower wind speeds in 2021, the incremental demand for energy had to be met by generating heat from coal and natural gas.
Gas leaks
Power generation a gas has become a loss-making business in the wake of the surge of prices of the gas and the transition from carbone a gas he stopped. Consequently, coal-fired power generation jumped 41% in Germany and 24% at EU level, while gas power generation remained unchanged in Germany (+ 3%) and dropped slightly (-1 %) in Europe. With the more expensive gas-fired power generation setting the marginal price of energy in Europe, electricity prices have soared across Europe. Since the beginning of the year, one-year forward electricity prices have quadrupled in the UK and more than doubled in Germany, France and Switzerland.