In recent months, the attention of players in the European gas market has been understandably focused on Russian supplies. People living in Mallnow on the German-Polish border could hardly have imagined that their village would become the key point on the continent’s energy map for some time. The reality is that the Yamal pipeline flows have recently determined price movements at regional hubs.
Meanwhile, gas market does not live by imports from Russia alone. Apart from multiple factors that caused a certain disquiet among market participants (shipments through Mallnow dropping to zero, net withdrawals from European storages speeding up, La Niña expected to add to Asia’s power demand, etc.), there was at least one encouraging development. After several months of reduced wind power electricity production in NWE, where the largest number of the continent’s wind turbines are located, power generation from that energy source significantly improved in early winter.
In October, wind generation in Germany, France, the Netherlands and Belgium combined averaged above 600 GWh/day, the highest level since February 2021. Last month´s increase in wind-farm output is especially notable when comparing with the figure for the period from June to September 2021, which stood at 300 GWh/day. The share of wind in the electricity mixes of the four countries also doubled in October as compared to the previous month.
With wind plants being actively used, gas demand from NWE utilities generally decreased month on month in October, which could not have been more relevant given the high price environment. In the Netherlands, for instance, gas-fired generation was 60 GWh/day on average last month, compared to 85 GWh/day between June and September 2021. In other weather conditions, the country´s electricity producers would have faced difficulties in turning away from gas.
Even with the rebound in October’s wind power generation, 2021 has been marked so far by low output from wind farms. But in the situation in which European energy market finds itself this winter season, it is much more important for players to have ample winds for power generation in the last part of the year as heating demand rises.
Source: Yakov Grabar (LinkedIn)