2023-08-21 04:29:00
The question today is to know what will happen next. “Several scenarios are on the table, but none evokes a further drop in prices, warns Damien Ernst, professor at the University of Liège. Forecasts for the winter months are around €50 to €60 per megawatt hour, which is still quite expensive. For a household that has a consumption in the Belgian average, we are on an increase of more or less €1000 compared to 2021. We cannot therefore say that the situation has returned to normal, this remains a significant item in the household budget.”
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But why should we expect further price increases, when the markets closed on Friday at €36 per megawatt hour? “With regard to the recent rise, there is talk of the fear of losing the last imports of Russian gas to Europe. Then there is a strike on the LNG market that is affecting Australia. This country accounts for 10% of the total market, and a prolonged strike can contribute to a sharp rise in prices. It is for these reasons in particular that we do not expect a reduction in prices in the short term, he explains. For the winter, we will see an increase for two reasons. On the one hand, the strategic stocks of European countries are currently full. As soon as the temperature drops and the days get shorter – because the price of electricity is also defined by the gas market – consumption will increase. It will then be necessary to meet the needs of consumers and supply strategic reserves.”
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This is what explains these forecasts of around €55 to €60 per megawatt hour for the coldest months of the year. “We will stay around these prices if nothing happens on the Russian front, if the Australian strikes end quickly and there are no attacks on European gas pipelines. As I often say, the situation is hanging by a thread and a sharp rise can never be ruled out. On the other hand, I don’t imagine that prices might drop in the coming months,” he regrets.
According to him, the only thing that might bring prices down is… a major economic crisis. “A big recession might drive prices down, but that wouldn’t be good news because it would be due to a significant drop in demand.”
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