Energy prices dropped in Europe after a major storm battered the continent’s north.
Storm Isha damaged properties and disrupted travel after hurricane-force winds, but also boosted wind-power generation.
The U.K. registered record-breaking wind power output over the weekend, with wind accounting for 71% of energy generation at one point during the storm: Offshore wind normally generates about 30% of the nation’s energy. Wind generation was also projected to hit record levels in Germany.
Abundant supply means low prices, even as war bites
Higher than usual wind generation and unseasonably warm temperatures sent energy prices tumbling in Europe following the storm. Natural gas futures dropped to a six-month low, and energy costs briefly turned negative in France and Germany, meaning supply outstripped demand, Bloomberg noted. Energy prices in the region have fallen even as war has broken out in the Middle East, a factor which has historically meant high oil and gas prices. “European gas seems to neglect the risk of the Israel-Hamas war escalating into a regional conflict amid robust storage stockpiles, ample supply and weak industrial demand,” a Bloomberg analyst wrote.
Price slump highlights need to transition to green energy
The low prices are evidence of the U.K.’s need to invest in renewable energy, a correspondent at the Scottish paper The Herald argued. Volatile geopolitics over the past two years — from Russia’s full-scale invasion of Ukraine to the Israel-Hamas war — have meant that Europe has grappled with energy production and high importing fees, business journalist Kristy Dorsey wrote: London needs to invest in green energy as a matter of long-term policy, since U.K. energy prices are “completely exposed to the erratic acts of nature and foreign aggressors.” While the U.K. has shifted its gas dependence to the U.S. following the onset of the Russia-Ukraine war, that too could soon be disrupted, Dorsey added: “Who would care to wager on the actions of a US administration potentially under the leadership of a new president to be elected later this year?”
Wind already edging out coal power in Europe
Wind power contributed more energy to the European grid than coal for the first time in the last quarter of 2023, data collected by energy think tank Ember showed. It’s so far unclear whether that trend will hold, Reuters noted, since coal production surged in the second half of 2023 in response to heating demands. If “power firms follow through on the planned development pipeline, wind power looks set to consistently overshadow coal power in Europe’s electricity generation mix over the longer run,” Gavin Maguire, a Reuters columnist focusing on the global energy transition, wrote.