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Aug24 #Business #Energy Market Report - Contrary to the movements observed in the preceding month, and across most of 2024, #power and #gas contracts with shorter durations recorded losses month-to-month. Despite the price losses, it is important to acknowledge that prices remain sensitive to change, especially as GB is more exposed to the global market for its procurement of gas.   This was particularly apparent during July when Hurricane Beryl exacerbated supply fears for the West following an outage at the Freeport liquified natural gas (LNG) export facility in the US. Similarly, reduced gas supply from the Norwegian and UK Continental Shelf across various periods of the month further solidified concerns surrounding supply.   Day-ahead gas registered a 9.0% loss month-on-month to average 74.49p/th due to demand reductions as the higher temperatures limit total heating demand. Similarly, front-month contracts registered price drops, with August 24 seeing a 9.0% loss to 75.13p/th, and September 24 dropping 7.3% to 79.71p/th.   Similar to the front-month contracts, most seasonal gas contracts out to Winter 26 showed decreases, but we note outliers in the summer 26 and Winter 26 contracts which saw a gains of 2.0% and 2.1%, respectively.    This led to an overall decrease of 0.1% across seasonal gas contracts, with an element of risk remaining across the medium-term as the present gas supply environment remains relatively uncertain despite elevated levels of EU gas in storage.   Elsewhere, demand profiles in Europe and South-East Asia across the winter period could play a key role in shaping future price movements for gas, particularly if we see competition between the two markets rise for the procurement of LNG. Currently, LNG demand from Europe remains subdued due to high gas storage stocks, currently at 85% at the time of writing, leading to the overall losses registered across gas contracts.   Following the bearish pricing sentiment experienced across its day-ahead gas counterpart, day-ahead power prices fell 7.4% to average £70.14/MWh in July, falling to the lowest level seen since April 2020 at £17.26/MWh on 3 July following high wind generation and low system demand on the day.   However, stronger losses were limited by a month-on-month reduction in wind generation levels, acting to increase the reliance on more expensive forms of power generation. Moreover, continued extensions to French nuclear power generation acted to decrease interconnector flows from the country, in tandem with the maintenance across the GB nuclear fleet throughout the month. Gavin Towers Richard Dickson Freddie Cooke

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Energy trading: Past, present, and future – all in one episode! 🚀🌍 Fascinated by the evolution of energy trading? Join EnergyOutLoud as we chat with Tim Greenwood, Managing Director at European Energy Exchange AG. From the German market’s early days to global domination, and the rise of algorithms, this episode covers it all. Tune in for a deep dive into the future of the energy industry! 🎧🔍 ➡ https://lnkd.in/dehTQdYf #trading #energy #algo

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Fast forward 20 years and #LNG is a truly global energy business, isn’t it? But will LNG make it to the top, or will electrification and increased energy production from renewables stop it from doing so? Yiyong He Greg Molnár @Michaelstoppard Ira Joseph LNG Journal LNG Considered the Next Global Energy Business With natural gas demand continuing to build around the world and a number of countries looking for the chance to supply it, the global liquefied natural gas (LNG) industry could emerge as the second global energy business, according to Michael Stoppard, Cambridge Energy Research Associates (CERA) director of Global LNG.

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India’s Power Market Regulation 2021 by CERC, indeed represents two critical steps that are set to strengthen and mature the electricity market in the long run. By introducing Over-the-Counter (OTC) platforms, the regulation aims to create more flexibility and transparency in bilateral trading of electricity. OTC platforms allow for direct transactions between buyers and sellers, providing a space for customized contracts. This opens up opportunities for market participants to engage in non-standard products, which enhance liquidity and risk management in the market. Market coupling is another important step forward, as it aims to integrate different power exchanges in India. Also couple PXs with SCED too. By creating a single, robust reference price for electricity across the country, market coupling ensures efficient use of available transmission capacity and minimizes multiple price disparities. This leads to a more competitive market, cause further economy, reducing transaction costs, improving price signals, and aligning with the best practices. Both these initiatives are pivotal in making India’s electricity market more efficient, transparent, and liquid, ultimately supporting the integration of renewables, capacity markets, derivatives and innovations like 5-minute markets…#ElectricityMarket #MarketCoupling #OTC #India 🇮🇳

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⚡ Energy costs have been a hot-button issue across Europe in recent years, with prices fluctuating dramatically and tax policies playing a significant role. As we navigate the complex energy landscape, it's crucial to understand the factors shaping this evolution. The attached visuals 📊 offer a compelling glimpse into this complex landscape, but let's dive deeper into the factors driving these dynamics. Firstly, the spike in energy prices, 💰 particularly in 2022, can be attributed to the fallout from Russia's invasion of Ukraine. According to the International Energy Agency, European gas prices soared by over 60% in 2022 due to supply disruptions and sanctions on Russian energy imports. This ripple effect was felt across the continent, 🌍 with countries like Germany, Spain, and Italy experiencing significant price hikes. The visuals reveal that household electricity prices in these nations reached staggering levels in 2022 and 2023, 📈 with tax values contributing substantially to the overall cost burden. However, it's not just geopolitical tensions that have shaped this landscape. 🔋 The accelerating energy transition and the push towards renewable sources have also played a role. As per the European Commission, countries like Sweden and Norway have leveraged their robust renewable infrastructure to maintain relatively lower electricity prices. ☀️ Closer to home, the Netherlands has implemented a strategic tax policy to drive sustainable energy consumption. The Opslag Duurzame Energie (ODE) or Sustainable Energy Surcharge, introduced in 2013, levies a tax on electricity and natural gas consumption, with revenues allocated towards subsidizing renewable energy projects and promoting energy efficiency initiatives. Notably, the ODE rate on electricity has risen from €0.0226 per kWh in 2020 to €0.0552 per kWh in 2023, representing a significant increase of over 144% within this period. While this tax policy has contributed to overall electricity prices in the Netherlands, it aligns with the country's ambitious goals of reducing greenhouse gas emissions by 49% by 2030 and achieving climate neutrality by 2050 . This intricate interplay between energy policies, taxation, and consumer costs underscores the need for a holistic approach to energy affordability and sustainability.  At E.ON One, we remain committed to being at the forefront of this transition, investing in innovative solutions and advocating for policies that foster a sustainable and equitable energy future for all Europeans. I encourage you to explore the visuals, share your insights, and join the conversation using #EnergyPrices #EuropeanEnergy #Sustainability #DutchEnergyPolicy.  Together, we can navigate this complex landscape and shape a brighter, more sustainable future. ☀️ 💪 #EnergyTransition #RenewableEnergy #E.ONONE #EnergyPrices #EnergyTrends 

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Did you know we also have experience in system implementation projects? And then in a multi-complex stakeholder environment!!! Our expert Mark Klein Entink is happy to share his thoughts in below blog post. Here to guide you! #systemimplementation #testing #complexprogrammanagement #systemintegration #consulting

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Renewable Energy: Hedge funds go short on green energy, bet on oil and gas Large hedge funds are betting on fossil fuels. Many areas of green energy generate too little profit. The energy transition could dry up financially. 25.10.2024 Despite political assurances in favor of a green agenda, investors seem to have lost faith in the energy transition. Despite extensive stimulus packages for green investments in the US, Europe and China, the majority of hedge funds are net betting against companies in the battery, solar, electric vehicle and hydrogen sectors. By contrast, investments in fossil fuel companies such as oil, gas and coal are popular with investors. The figures are based on an analysis by Bloomberg News of the positions of around 500 hedge funds from the Hazeltree database, a data service in the alternative investment industry. The funds manage assets worth a total of five trillion dollars. The Bloomberg analysis is significant because this segment of investors is reluctant to show their cards. However, hedge funds are an important player in the market: they risk a lot and only actually go short when there is a really high probability that a value will crash. Hedge funds therefore analyze the figures of companies very meticulously and at the same time observe the development of the markets. They are not interested in political slogans. They look exclusively at the increase in value in the real world and its reflection on the financial markets. In the case of renewable energies, it is now particularly evident that many companies are failing to achieve profitability within a reasonable timeframe. Bloomberg formulates the reason why investors are turning away from Wall Street's former favorites: “Despite the promises, clean energy and green technology stocks have lagged far behind the broader market.” Financially strong institutions have come to the conclusion that many climate investments will not pay off as quickly or as lucratively as they had hoped. Price performance in the green economy sector is particularly critical: since a recent peak in 2021, the S&P Global Clean Energy Index has lost almost 60 percent of its value, while the S&P 500 Index and the S&P Global Oil Index have risen by more than 50 percent. Impax Asset Management, a $50 billion investment firm that has made a name for itself as a pioneer of the energy transition, has seen its market value more than halve over time. The slowdown in sales growth has made managers increasingly pessimistic about electric vehicles: 55 percent are betting against electric cars. At the beginning of 2021, it was only 35 percent. The trend has its counterpart in the fossil fuel sector: the number of hedge funds with long bets on companies in the thermal coal, oil and gas sectors exceeded the number of hedge funds with net short positions at the end of September.

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Risk is sometimes considered the unsexy end of energy trading but it is vitally important to managing an asset or demand position. Shaped price forward curves from the Montel Analytics team in Halle can help you manage this risk. Register for the webinar to find out how these curves are modelled and created.

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AO5 RESULTS – A BITTERSWEET MILESTONE FOR FLOATING OFFSHORE WIND! The results of the floating offshore wind tender AO5 came out this week, and the 250MW project was awarded to a consortium of BayWa and Elicio at a CfD price of €86.45/MWh. While it is great to see the first commercial-scale floating wind farm being awarded in a well-attended auction, the level of the winning bid raises a few questions on viability for the sector. Here are my key take-aways: 1. Frankly it is difficult to see how one can make a viable business case for floating wind below EUR 100/MWh in today’s market. One specificity of the French tender is that FID will only take place in a couple of years, but counting on significant cost decreases seems an audacious bet. Cynical voices suggest that aggressive bids may be counting on discretely renegotiating the CfD with the state in case of issues (by playing on parameters other than the strike price; somehow that rings a bell…). 2. The low strike price may end up discouraging some developers and investors in terms of overall attractiveness of the sector and setting overly ambitious expectations for subsidy levels in other countries. 3. Despite market clamours about stabilising the WTG size around 15-20MW most bidders have been using turbines above 20MW, with 23MW for the winning bid. Interestingly the winning bid scored zero point on the justification of turbine size (or the Capex). 4. There have been a few comments about ‘conservative’ assumptions with short payback and low gearing. It’s important to keep in mind that payback and gearing are typically outputs of the business case and not choices as such. The short payback simply reflects the high subsidy level (which means most of the value comes from the CfD period); and low leverage is a result of long lifetime and tight economics. 5. Quantitative floating tenders are largely decided by Capex and Opex estimates (and thus the technical solution), which vary wildly between participants. This is fundamentally different from fixed-bottom tenders where decisive factors tend to be non-technical parameters such as power prices or return requirements. For future auctions, the French regulator is pushing to significantly decrease the weight of the CfD price in the ranking while increasing the weight of the credibility assessment. This may well be beneficial in limiting the incentive to bid aggressively, but personally I’m always wary about subjective criteria. Quantitative tenders have worked well in the past but in a more turbulent environment this requires discipline from all participants.

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According to Group CEO Greg Newman, every politician should learn about trading.   In the latest CEO Address, Co-Head of Power & Gas from the Onyx Switzerland office, Mirko Ivanda, joins Greg to discuss the European energy market - from geopolitics, to clean energy, household bills, and more.   Watch the full discussion here, or listen wherever you get your podcasts: https://lnkd.in/eKPy-MYx   #finance #energy #oott #commodities #oilandgas #oil #trading #markets #marketanalysis #derivatives #derivativestrading #economy #economics #europe #eurozone #Ukraine #Russia 

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Lets see, while #Renewables and #electrification eat away some parts of the demand, other pockets of demand might appear, if prices go lower. #LNG is still the only available alternative for Heavy Duty vehicles and Deep Sea shipping, with both #Ammonia and #Methanol need to further mature. Who knows if Space travel might appear as the next big thing, given that LNG is much cheaper than Liquid #Hydrogen. Joking aside, oversupply will drive down prices and low prices will spur demand. Lackluster demand growth combined with a massive wave of new export capacity is poised to send global #LNG markets into oversupply within 2 years. In Japan, South Korea, and Europe—which together account for more than half of the world’s LNG demand—combined imports fell in 2023 and will likely continue falling through 2030.

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The ECB has taken a first step towards lower interest rates. This is a good signal for investors in renewable energies. “It’s not just that the cost of financing is falling, which is fuelling investment activity,” said Markus W. Voigt, CEO of the aream Group. “Bonds also tend to be less attractive now, which is diverting money into renewables.” Interest rate cuts generally lead to lower borrowing costs. Borrowing money for infrastructure projects becomes correspondingly cheaper. With more or less constant returns, this increases the yield. And even if it is not yet clear when the interest rate cuts will continue. “For many investors, this is a clear signal that investments such as renewable energies are becoming more attractive,” continued Voigt. “A significant increase in investment activity can be expected here.” “It will also be cheaper to refinance existing debt,” he added. Companies will be able to refinance their existing loans at lower interest rates again. This improves the financial situation and frees up further funds for new investments. In addition, infrastructure projects are long-term investments. Lower interest rates make such projects more attractive, as the expected returns are higher compared to the financing costs. And as far as returns are concerned, falling interest rates mean that investors are even more willing to invest in infrastructure projects that deliver stable, long-term returns. “This makes investments in renewables much more attractive, especially in comparison with bonds,” noted Voigt. Existing investments can also be valued higher, as investors are prepared to pay higher prices for investments with stable and long-term cash flows. In any case, falling interest rates are an advantage for investments in renewable energies. “The ECB has done the energy transition a real favour by initiating a cycle of interest rate cuts,” noted Voigt. #cleanenergy

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Tomorrow, I will speak at the 9th #EnergyTransitionCouncil on implementing global #3xRenewables and #2xEnergyEfficiency targets. I will delve into "Financing the Future: Mobilizing Finance for the Energy Transition" and highlight the vital role of Development Finance Institutions (DFIs) in this journey. I look forward to engaging with Mattias Frumerie, Ramesh Subramaniam, Dr. Demetrios Papathanasiou, Daniel Schroth, Nandita Parshad, H.E. Justin Tomlinson and H.E. Raphael Lotilla on how we can collectively drive the energy transition forward.

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Interesting thinking about the electricity market and how market forces could support an evolution of the way we do business there. "For instance, similar to markets that trade different grades of crude oil (WTI and Brent), perhaps we can “grade” energy based on its characteristics, so that energy that includes inertia and VARs is valued higher than energy that doesn’t include these other characteristics. A MWh of energy from a synchronous generator has a higher operational reliability value than a MWh of IBR energy, so how can we signal this economically?"

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#ISTS #transmission #charges #waivers and implications • Covers: - #Solar, #wind, and #hydro projects commissioned on or before 30 June 2025 - #Offshore wind projects commissioned on or before 31 Dec 2032 - #Green #hydrogen/ #ammonia projects commissioned on or before 31 Dec 2033 (100% waiver till 31 Dec 2030, 25% annually thereafter) • If not generators, who pays these waived charges? - Transmission charges are recovered from all designated ISTS consumers (DICs). - Waived ISTS charges are billed to the drawee DICs, ensuring the ISTS licensees recover the total transmission charges in full. - Hence, those buying ISTS waived renewable energy are cross-subsidized by those who don’t. Details: - The total waiver for April 2024 was ~INR258 crore on a monthly transmission charge of ~INR3600 crore, about 7% of the monthly transmission charges. - Monthly transmission charges might increase by ~INR2,000 crore by FY27, considering an estimated INR1,25,000 crore investment. - With rising monthly transmission charges and increased penetration of eligible sources for waivers, the percentage of the waiver on total monthly transmission charges and the total amount waived are likely to rise further.

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Excellent Substack by Julien Jomaux on the negative prices that have become widespread in last few years in Europe during the summer months. It’s evidence of an amazing development of PV technology and the rapidly reducing cost to generate near opex free power from the sun. PV taking over the bulk power generation looks inevitable. I was offered new tier one PV below €0.10/Wp. This is nothing less than an economic solar disruption. Supply has a logical twin: demand. New types of demand is potentially going to be even more important over the coming decade than PV driven supply disruption. 1. EVs continue grow and will increase ability to absorb TWh of power and also contibute to peak supply. 2. Battery storage in homes, businesses and utilities will grow exponentially, to do the intraday price differential (buy low, sell high). 3. Demand shifting allows consumers to save by switch on and off loads depending on price. Heat pumps, EV and stationary battery charging in particular can easy shift demand by hours. Problem isn’t excess supply or increasing demand. It’s lacking transparency in price. The actual and main reason we see negative prices in Europe is lack of a working price signal for both demand and supply. https://lnkd.in/eTvZtJVM

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An energy boost for the European energy transition: the reform of the EU Electricity Market Design has now been adopted – and it is positive news!    Our single European electricity market is an immense feat and key to a successful energy transition throughout Europe. This reform reinforces this with many beneficial components. Progress and simplifications have been made where needed, whilst potentially damaging aspects have been placed under review. Some question marks remain, but now, we are getting somewhere.    So, what exactly has changed? As you can imagine, many technical terms, whose acronyms comprise useful amends and mechanisms.   ▪The option to apply inframarginal revenue caps will not be extended – a policy that harmed not aided the energy transition through creating investment uncertainty for renewables.    ▪Two-sided Contracts for Difference (CfDs) will now be the standard for direct state support and Power Purchase Agreements (PPAs) will be strengthened. Both are important long-term instruments for investments in renewables.     ▪ Capacity Remuneration Mechanisms (CRM) will no longer just be considered a last resort, with the approval process also to be simplified. These schemes ensure capacities are available and ready to generate electricity for the grid, making sure customer demand for electricity is met. As the share of wind and solar increases, this will become even more important.    ▪ For offshore development, in particular, the addition of Transmission Access Guarantees (TAGs) is very welcome. This concept aims to mitigate the additional financial risks that offshore hybrid wind farms connected to more than one Member State face when their ability to export electricity is limited by for example onshore grid constraints.    But, of course, this does not mean that now everything is all wrapped up and sorted. For example, TAGs won’t mitigate all financial risks for offshore hybrid projects – here it will be vital to define a detailed framework as soon as possible to ensure there is clarity for upcoming projects.    Still, this is all a positive step for the European energy industry. More steps need to be taken, but we are now heading on the right path.

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#Business #Energy Market #Report – May24 - Mostly upward trends were observed across most tracked #gas and #electricity contracts, continuing the overall bullish wholesale pricing movements that have been observed since March. However, day-ahead power was the exception, recording a month-on-month loss. Seasonal gas contracts from Winter 24 to Winter 26 were on average 8.6% higher in April when compared to the previous month.   This was due in part to elevated levels of maintenance across the Norwegian Continental Shelf, limiting total gas flows to GB.   Moreover, forward contracts recorded gains as higher Asian gas demand for storage restocking, ahead of the winter period, bolstered competition for LNG shipments across Europe. Winter 25 was the premium gas contract, averaging 90.20p/th across the month.   Across the month, we saw the day-ahead gas price rise 5.0% to average 71.71p/th. Likewise, front-month contracts were up 7.5% on average when compared to March, with May 24 seeing a 6.6% rise and June 24 recording an 8.4% rise to 71.67p/th and 71.17p/th, respectively.    However, stronger gains were limited by high gas storage stocks across Europe, sitting at approximately 62.0% full at the time of writing, 3.4 percentage points above the levels seen last year according to data from Gas Infrastructure Europe. Despite being heavily influenced by its gas counterpart, day-ahead power prices averaged £58.78/MWh across April, down 10.0% when compared to the prices observed last month.   This loss can be attributed to higher levels of wind generation across April, acting to decrease gas demand and the requirement for more expensive fossil-fuelled emitters.   Likewise, day-ahead power was further influenced by a decrease to carbon prices across the UK.   As a result, day-ahead power prices fell to the lowest level seen since July 2020 on 12 April at £26.50/MWh, and GB achieved a new low carbon intensity record of 19gCO2/kWh on the 15 April at 1pm – beating the previous record of 21gCO2/kWh achieved earlier in the month on 5 April.   A bullish trend was recorded across contracts further out on the forward curve, with May 24 rising 2.6% to £61.96/MWh and June 24 growing 7.2% to £63.53MWh. Likewise, seasonal power prices saw an upwards trend, increasing 6.0% on average – with Winter 25 the premium market, standing at £80.89MWh, up 7.0% when compared to March.   Despite these upward movements, stronger gains were limited by the return of the Heysham 1 and Hartlepool nuclear reactors from maintenance at the beginning of the month, bolstering available power capacity across April as a whole.

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