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For the current energy market, in addition to the continued high price of crude oil, the rising prices of coal and natural gas have also become a top priority.

Affected by rising energy prices, global electricity prices have risen sharply since last year, reaching new highs repeatedly.

As this summer approaches, coal and natural gas prices remain high. The world is worried whether global electricity prices will "break through the sky" this summer?

1. Natural gas prices soared

Since the outbreak of the Russia-Ukraine conflict, natural gas prices have increased the most.

On the one hand, because Russia is a major natural gas exporter, after the conflict broke out, Russian gas supply was tight and prices rose sharply; on the other hand, European natural gas prices have risen since last year.

In the past, Europe has been vigorously developing new energy sources. However, due to multiple factors such as weather, new energy sources almost came to a standstill last year, forcing Europe to return to reliance on traditional energy sources.

Europe’s traditional energy dependence on foreign countries is too high. Crude oil, natural gas, and coal are all highly dependent on imports, with a foreign dependence rate of 60%.

As a result, the surge in demand caused natural gas prices to rise significantly, reaching a peak of 10 times.

This influence continues to this day.

On the other hand, with the outbreak of the Russia-Ukraine conflict and the impact of a series of sanctions, Europe is reducing its dependence on Russian gas and turning to importing large amounts of American natural gas.

Since this year, U.S. natural gas futures prices have risen by 127%, reaching the highest level since 2008 for a long time.

2. Coal stocks are in short supply

What is more troublesome than natural gas is coal.

On the one hand, as the price of natural gas rises, the price of coal also rises sharply due to the surge in demand.

The price of high-quality thermal coal futures at the Port of Newcastle in Australia rose by more than 140% during the year, while the U.S. thermal coal market price also climbed by 40% during the year, not only hitting a record high, but also rising by one percent from a year ago. More than twice that.

On the other hand, global coal inventories have also fallen to low levels.

For example, coal inventories at U.S. power plants fell to their lowest level since the 1970s in September last year. Coupled with the surge in demand, the inventory is even tighter.

According to the latest data from the U.S. Energy Information Administration, in March this year, coal inventories at U.S. power plants were about 44% lower than the average level of the past 13 years.

Another example is India, the world's largest coal consumer. Affected by geopolitical conflicts and high-temperature weather, coal demand has increased significantly. However, India is a large coal consumer, and the surge in demand has reduced coal inventories to 2014. new low since.

In order to increase coal supply, Coal India will import coal in the near future, and this will be the first time in the past seven years.

Coupled with Europe’s previous preparations to impose a ban on Russian coal imports, which will take effect in August this year, this has further intensified the global coal supply.

3. Global electricity prices have risen sharply

The rising prices of coal and natural gas have also put global electricity under greater pressure.

According to the latest data from the United States, 70% of the power grids in the United States are overloaded, and power grids in about 11 states are also at risk of power outages.

In Japan, the power supply was already in a tight state in March. It is expected that even if the next winter comes, the power supply will still be in a tight state. The government has called on the people to save energy and watch less TV.

European electricity prices are under greater pressure. For example, in Italy, household electricity prices increased by 131% in the first quarter of this year; in Spain, electricity prices in February also increased 24 times compared to the same period last year; many households in Germany It said it could no longer afford electricity; France's largest electricity producer also recently said it would lower its nuclear power production target again this year, and it is expected that after the reduction, electricity prices will rise again by 8.6% in the fourth quarter.

With the arrival of summer, the weather is getting hotter and hotter, and the peak of power demand is coming.

But obviously, as global coal and natural gas prices continue to rise, the world is worried that this summer, global electricity prices will really "break through the sky" again.