German investors remain anxious about the prospect of energy supply for the winter – the year-ahead electricity price held near yesterday’s all-time high for the country even though Russia’s Gazprom increased gas exports. Earlier it imposed retaliatory sanctions on its European subsidiaries following a pipeline halt in Ukraine.
Gas prices in Europe declined after yesterday’s notable jump, helped by favorable weather conditions. More importantly, gas flows to Germany resumed at an expected pace as Russia’s Gazprom boosted deliveries following a halt at a pipeline in Ukraine. The country’s government has blocked the system and accused troops controlled by Russia of illegally tapping gas.
Gazprom switched to another pipeline in Ukraine. But the markets remained nervous after it imposed retaliatory sanctions on a group of its own subsidiaries in European countries and beyond and said it would stop sending gas to Germany through the Yamal pipeline, which passes through Poland.
German year-ahead baseload price hit a record EUR 233.5 per MWh yesterday
Total levels increased significantly in the meantime, but German year-ahead baseload price traded only slightly lower this morning after hitting a record EUR 233.5 per MWh yesterday. The baseload power price for delivery on May 16 in Germany jumped 22.8% to EUR 207.5 per MWh, Reuters reported. Conversely, the Dutch TTF gas futures contract, a benchmark for Europe, dropped 3.7% to EUR 102.75 per MWh.
Germany’s Vice Chancellor and Minister for Economic Affairs and Climate Action Robert Habeck said the deliveries to Gazprom’s subsidiaries in the country yesterday declined 3%. He accused Russia of weaponizing gas, prompting speculation that the government in Berlin could expropriate Gazprom’s assets.
German Minister Robert Habeck accused Russia of weaponizing gas
Nevertheless, it is in Russia’s interest to keep selling as much gas as it can as its oil output is declining.
In other news, Spain and Portugal today capped wholesale gas prices for power plants to EUR 48.8 per MWh for the next 12 months, with the intention to push spot electricity prices lower.