Natural gas and coal reserves may not keep up with the changes in the situation.
Last weekend, the Group of Seven (G7) announced that it agreed to set a price ceiling for Russian oil. Soon, Russian energy company Gazprom announced that due to technical problems, Beixi No.1 gas transmission will stop indefinitely. In addition, the EU has announced a plan to ban Russian coal, and the EU's energy supply channels have been further reduced.
In the past few months, the EU has reserved some energy. At present, Europe's natural gas storage capacity has reached more than 80%. In terms of coal procurement, from April to August, several EU countries restarted coal-fired power generation and began to purchase coal in large quantities in the global market. At present, the coal inventory in Europe has reached a certain scale.
It is obviously unexpected for the EU that Beixi No.1 stopped gas transmission. Everbright Futures predicts that by the end of March next year, if Russia does not relax its natural gas supply to Europe, the European natural gas market will face an extreme shortage, and this tense situation will also spread to the global natural gas market.
Yang Jie, deputy director of the research department of Yimei Research Institute, said that if there is extremely cold weather in Europe this winter and there is a shortage of natural gas, it is expected that the natural gas purchased in Europe will be difficult to make up for the energy rigidity gap, the output of restarted nuclear power and coal-fired power plants will increase, and the demand for coal procurement will further increase, which will push up the international price of high-calorie coal.
In the past month, coal prices have gone up. The price of 5,500 kcal thermal coal in Port Richard, South Africa rose from 209.66 USD/ton to 246.04 USD/ton. The price of 6000 kcal thermal coal in Northwest Europe rose from $334.96/ton to $365.65/ton.
Before Beixi No.1 stopped transporting natural gas, the electricity prices in many countries in the European Union kept setting new records. The electricity price in France once reached an all-time high of 1 130 euro /MWh, and the electricity price in Germany once reached a record of 995 euro /MWh. Unexpected "death" will further aggravate the energy anxiety and economic burden of European people.
Power trading faces great challenges.
The serious instability of energy supply also challenges the existing electricity trading mechanism in Europe.
Due to the huge fluctuation of European power market in recent weeks, many hedging transactions of power traders are challenged, and they are required to pay more and more deposits to the exchange or cause financial risks.
The latest news shows that the Czech Republic, which holds the rotating presidency of the European Union, has included a series of solutions in the list of emergency intervention options, which will be discussed at the meeting of energy ministers on September 9. In addition to increasing credit lines to provide liquidity support, the list also includes measures such as reducing electricity demand, setting price ceilings for renewable energy, nuclear energy and coal, setting price ceilings for natural gas, modifying margin rules and suspending the European power derivatives market.
The German Ministry of Economic Affairs has also put forward the reform intention, hoping that by reforming the electricity market, the electricity price will no longer be linked to the most expensive suppliers to cope with the soaring energy costs.
Haoyong Chen, director of the Institute of Electric Power Economics and Electricity Market of South China University of Technology, said that the current energy crisis in Europe, especially the electricity market crisis, is indeed very serious, and the EU has also decided to modify the rules, but mainly set the price ceiling for non-marginal units (that is, units that do not use natural gas). Whether the energy crisis, inflation and economic recession will cause a wider financial crisis needs further observation.
The problem of energy shortage will also ferment
Haoyong Chen believes that the development of the unified electricity market in the EU has gone through three stages, from the national electricity market to the regional electricity market, and then to the unified electricity market. Due to the different energy resource endowments and people's attitudes of EU countries, this unified electricity market is facing the risk of disintegration.
According to the Norwegian side, because the public utilities in the southwest of the country are facing serious water shortage problems, it will take improving the safety of their own power supply as the primary task. Power grid operators in Sweden, Finland and Denmark said in a joint statement that the move dealt a heavy blow to the unity of Nordic countries.
EU officials remain tough. According to Reuters, on September 3rd, local time, when asked about Beixi No.1, EU Economic Commissioner Paul Gentiloni responded: "We are not afraid of Beixi No.1' s decision to stop gas transmission. We demand that Russia respect the energy transportation contract. If Russia does not respect the contract, we are ready to respond. "
German Chancellor Angela Scholz said that Russia is no longer regarded as a reliable supplier of oil and gas. At the same time, he announced additional measures worth 65 billion euros, aimed at protecting German consumers and enterprises from the rising inflation rate caused by the energy crisis.
The winter in Europe is getting closer and closer, and the situation of energy shortage will be further amplified. The energy crisis may lead to financial crisis and geopolitical crisis, just like the sword of Damocles hanging over Europe. Obviously, EU countries have stood at a fork in the road, and what to choose is particularly crucial.
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