Natural gas has become so cheap that some power plants in Europe have started using this type of fuel again, according to Bloomberg, which is cited by Agerpres.

In the short-term market, the price of natural gas has fallen as high temperatures keep gas demand low and gas storage on the continent is nearly full, making it more cost-effective for power producers to use gas instead of coal. This comes after coal has been the cheapest fuel for several months, and countries such as Germany and the UK have announced they are extending the life of coal-fired power stations to ensure power supply during the winter.

According to data from the European Association of Transmission and System Operators in Europe (ENTSO-E), gas-fired power generation in Germany averaged 8.4 gigawatts on Tuesday, 33% above the average over the past 30 days. Also in the Netherlands, gas-fired power generation was 5.9 gigawatts, 44% higher than the monthly average, while coal-fired power generation halved to 835 megawatts, the lowest level since May.

The price of natural gas has halved this month due to unusually warm temperatures for this time of year, which has delayed the start of the fuel supply season, while continued high liquefied gas imports mean more fuel is being pumped into gas fields, and therefore almost full. . In contrast, coal prices fell by only a fifth in October, making it more profitable for power producers to use gas instead of coal.

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“When it gets colder and people start using gas from warehouses, prices will definitely normalize”

At the same time, electricity prices are falling. On the German market, prices for electricity delivered next month fell 2.5% to 234 euros per megawatt-hour, the lowest since June.

With large amounts of gas coming to Europe at a time when demand is relatively low, at some point traders may find themselves being paid to get gas from sellers. On Monday, prices briefly fell into the red at the Title Transfer Facility gas hub in Amsterdam, where benchmark quotes for Europe are set.

Of course, it is unlikely that the drop in gas prices will be a long-term phenomenon.

“Liquefied gases cannot be unloaded into storage because they are already full, and this reduces the cost of gas in the short term. Of course, when it gets colder and people start using gas from warehouses, I think prices will definitely normalize,” says Jean-Paul Hareman, director of EnAppSys.