On the other hand, the price of gas has also had abrupt changes in the rest of Europe after the Russian invasion of Ukraine, bringing with it a 50% price increase, that is, more than 100 euros/MWh, this increase in prices directly impacts electricity prices, leaving it at 300 euros/MWh, generating a double increase in people’s bills, since for every euro that gas goes up, the price of electricity shoots up to two euros, putting in a difficult situation for the entire energy market of the old continent and making it even more difficult to register with the cheapest gas company.
Russian shares in the energy market 2022
Gazprom, Russia’s largest energy company, announced a measure that required all gas purchases to be made in Russian currency, thus obliging the countries of the old continent to have accounts in Russian banks or in any case to be able to this purchase in that currency. Countries such as Poland and Bulgaria did not make the payment in Rubles (Russian currency) and saw the consequence that the shipment of gas to their respective countries was suspended.
After this suspension, the wholesale price in the energy market given by Russia has shot up 20%. For the European Commission, this is another attempt by Russia to use its energy power as a means of blackmail, quoting the price of natural gas up to seven times more expensive compared to a year ago.
Consequences in the energy market
The consequences in the energy market according to experts from electricity companies are as follows:
Gas rise: This confrontation has taken gas prices to historical highs, increasing by 29% and exceeding 100 euros/MWh, this has caused a skyrocketing inflation that directly affects consumers’ pockets. For this reason, it is important to use a natural gas comparator to compare the different rates and save on your bill.
Light Rise: Not only is the gas market affected, but it will also affect our electricity bill. Electricity has risen up to 17% to reach 240.13 euros/MWh, thus being the highest price of the year and six times higher than a season ago. For this reason, it is advisable to use a light comparator to save on electricity.
Does Europe have a plan to divest itself of Russian gas?
So far there is no plan by Europe to be able to completely disconnect from Russian gas since this would mean greater variations in the price of gas, in addition they have a dependence on Russian gas equivalent to a third of total imports. This is where the concern comes in throughout the European and world energy market, because a possible closure of the Russian market, as we have seen in Poland and Bulgaria, would leave the market without supplies.
Russia planned this dependence of Europe on Russian gas well, since for a period of time it did not sell gas in cash as in previous years, thus leaving Europe’s reserves at low levels, ensuring long-term dependence. The market in general, seeing all the possible consequences, plans to fill the gas inventory in deposits as much as possible, in order to always have a reserve for this type of conflict and that the price does not rise in this way.
How much does the EU pay Russia for its gas?
Currently, the European Union pays 660 million euros to Russia for these imports, and after the sanctions imposed that have directly affected Russian entities in several countries, it is expected that in retaliation shipments to these markets will be cut, as we have been able to observe with Poland and Bulgaria, by Russia and this could mean a big problem for the European market.
This dependence brings with it the motivation to accelerate the entire energy transition in Europe, in order to continue reducing gas purchases from Russia in the long term and to be able to have a total disengagement in approximately 10 years. This transition is based on the following actions:
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The installation of offshore wind plants, solar plants, maximizing renewable energy as much as possible.
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Put nuclear power plants and biofuels into maximum production.
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Have a considerable reduction in the use of heating in homes and buildings in order to reduce the demand for gas.
Source: Ambito
