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Cold winter forecast - no relief in sight for energy consumers




Background

Meteorologists forecast a colder winter than normally, according to the Guardian. – There seems to be a common understanding among meteorologists and market analysts that the coming months are not very promising, says chairman of the board of Ewave Holding AS, Jarle Lysberg. Gas market price has experienced a 300% price hike the past year, mainly caused by increasing demand globally.


Perfect storm

The combination of soaring gas prices, increase in CO2- prices as well as record high electricity prices in Europe ensures a combination of the energy pricing peaking at the same time. Two weeks ago, electricity prices reached GPB 2.77 / kWh, causing shock waves in the European electricity markets.


Europe wide prices are spiking

Due to an increased number of high-capacity electricity cables between the UK, Germany and Norway, the record prices are infecting the traditionally low electricity prices experienced by Norwegian consumers and industry alike. This has already caused politicians to promise a reduction in energy related taxes to counter the massive price increases


Increased vulnerability due to increases share of renewables

The price increases are also caused by the ever-increasing share of renewable energy

production. Being advantageous with regard to climate change, solar and wind are also much more exposed for the unpredictability of the presence of sun and wind. As the renewable sources are replacing dirty, but predictable production of coal and gas-powered power plants, this increases the volatility of the supply side.


Europe needs increased development and installation of storage

As the renewable share of the energy production, the need for storage and integration becomes increasingly visible. Norway has been named “battery of Europe” due to its massive hydro-electrical capacity but will not be sufficient to provide all of Europe with the necessary storage. New storage technology has to be developed and implemented. Batteries are already available, but alternative solutions like hydrogen, pressurized air and other technologies need to be developed and implemented to ensure a stable energy supply.Meteorologists forecast a colder winter than normally, according to the Guardian.



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