Earlier this month the Institute send to its members its Monthly Analysis, part of its SEE Energy Brief, which covered developments last month in the sphere of electricity and gas prices focusing on SE Europe. As the IENE Analysis noted, «Europe is currently facing an energy price shock as the cost of natural gas and electricity surges to record levels.Earlier this month the Institute send to its members its Monthly Analysis, part of its SEE Energy Brief, which covered latest developments in the sphere of electricity and gas prices focusing on SE Europe. As the IENE Analysis noted, «Europe is currently facing an energy price shock as the cost of natural gas and electricity surges to record levels. A gas supply crunch is boosting the cost of producing power just as businesses reopen and people return to the office, increasing demand. Rising prices are fueling inflation and threatening to stall the economic recovery as energy-intensive industries from fertilizer to steel may need to curb output».
In its effort to become the first carbon neutral continent Eurocrats promoted a policy of high CO2 prices which resulted in a price rally with emission costs now well above € 70 per tonne, almost tripling in less than 18 months. However, as the IENE Analysis observes, «this coincided with the increase in LNG demand from the Asian markets, especially from China, which are in the decarbonisation process, as well as a gas crisis, with Russia deciding not to deliver the required gas quantities to Europe in order to push for the Nord Stream 2 pipeline. These factors led CO2 prices from the low level of €25 per tonne in 2019 and the very low level of €15 per tonne, due to COVID, in 2020, to over €70 per tonne in September, while they are expected to reach €65 per tonne over the coming months».
The Institute has now uploaded this most timely Analysis in its Publications section which can be accessed freely. Although a lot has happened in the price domain over the last 3 weeks this Analysis is still relevant, and one can only build upon it in order to understand the energy market dynamics. Now, a second parallel crisis is in the offing as the USA and allies are challenging the OPEC+ cartel in a desperate effort to control further oil price increases. But this warrants a separate analysis which is under consideration and will be send exclusively to IENE members in early December.
