The pipeline has not received an operating permit in Germany and is used as a bargaining chip in the Russia-Ukraine conflict. The political controversy over the Russian-German Nord Stream 2 pipeline adds to the problem. Pre-winter gas storage levels in the EU were at 77 percent of capacity - usually they stand at around 90 percent. At the same time, economic recovery increased demand in Asia and deliveries through Russian pipelines to Europe were reduced, leaving Europe’s gas storage facilities at a lower-than average level before the winter of 2021-2022. After the long, cold winter of 2020-2021, the country’s natural gas reserves were depleted more than usual. Germany uses natural gas both for heating and to generate electricity. This is not a renewables or a clean energy crisis this is a natural gas market crisis.” These assertions are misleading to say the least. ![]() The main reason behind the for high electricity prices is the high gas price, both the EWI and the German government have said.įatih Birol, executive director of the International Energy Agency (IEA), wrote: “Unfortunately, we are once again seeing claims that volatility in gas and electricity markets is the result of the clean energy transition. “While part of this increase is due to the current bottlenecks in energy supply, the main part of the increase in (energy price) inflation arises from the comparison with the below-average prices of crude oil and energy in the previous year,” they write.īottlenecks in energy supply at a time when the economy picks up again after a year of lockdowns in 2020 are the main reason behind the high prices in Europe and Germany in 20. Some of the price increases look especially dramatic because of the comparison with 2020, the German state development bank KfW has said. Electricity prices increased by more than 18 percent, meaning a household with a consumption of 4,000 kWh paid 215 euros more last year. The price of gas climbed by almost 47 percent, meaning a household with an annual consumption of 20,000 kilowatt hours (kWh) paid more than 1,700 euros last year, up from about 1,160 euros in 2020. This means that between 20, the year-on-year increase in the price of electricity, gas and heating oil was the highest on record, comparison website Verivox has said. ![]() Prices for imported hard coal also increased (to over 30 euros/MWh). On average, gas prices in 2021 were approximately 49 euros/MWh higher and therefore five times as high as in 2020. Natural gas in Europe cost as much as 150 euros/MWh. While 2020 saw lower-than-normal demand for electricity, natural gas and hard coal, and therefore cheaper power, the economic recovery in 2021 sent energy prices skyrocketing. In Germany, the wholesale price for electricity (paid by power traders on the market) more than tripled in 2021 to an average of 97 euros per megawatt-hour (MWh) compared to the previous year, reaching the highest level in 20 years, the Institute of Energy Economics at the University of Cologne ( EWI) finds in an analysis.
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