Page 9 - ITAtube Journal 3 2024

Market information
Figure 1: Selected spot prices of industrial electrical energy since 2023 in €/MWh
Source: Statista.com, Kallanish, com
corresponds to a price increase of 300%
in the last 20 years! Some countries with
larger nuclear energy sources, like e.g.
France (ab, 70 €/MWh), or other base-
load energy sources at reasonable cost,
still have cost advantages. Considering
for example US-Texas with an electrical
energy cost level of about 60-70 €/MWh is
about 25% lower than most European cost
levels. It will even become more unbal-
anced if some more European punitive
regulations or network costs become
effective. On the other hand, some ana-
lysts see further cost reductions in the
US. Countries like Saudi Arabia are even
offering electrical energy at 40 €/MWh or
less! This widening cost gap is increasingly
forcing companies to relocate their pro-
duction facilities to countries with more
attractive energy cost levels.
Cost of natural gas, one of the most
important energy source, after turbulent
times in 2022 has now in 2024 reached a
level of 1,75 to 3 USD/MMBtu (figure 2).
The volatility of the natural gas price is
still challenging the gas intensive indus-
tries and gas power plants. Regions such
as Europe nowadays depend to a great
extent on LNG (Liquified Natural Gas). LNG
on the other hand is by far more expen-
sive than normal natural gas. LNG con-
sumers are confronted with cost levels of
about 13 USD/MMBtu which is about 450%
higher than normal natural gas (figure
3). In Europe, just Austria and Poland still
benefit from low prices, sourcing their
natural gas via Jamal pipeline from Russia.
These remarkable additional costs for LNG
are applicable to such regions without suf-
ficient natural gas supply. Europe is one of
such regions with additional cost burdens.
Europe is buying LNG from USA, Kuwait
but also from Russia via third countries.
Extended European local gas exploration or
shale gas exploration are politically banned.
Therefore, hardly any short- or mid-term
measures are visible to overcome cost dis-
advantages European high energy consum-
ing industries are confronted with.
The long-term strategy to shift towards
green hydrogen to replace fossil energy
sources such as natural gas, are also ques-
tioned by specialists. Hydrogen produc-
Figure 3: LNG Global Price development 1 year up to October 2024
Source: International Monetary Fund, US Bureau of Labor Statistics
ITAtube Journal December 2024 9
Figure 2: Natural Gas price development 5 years up to 7th of December 2024
Source: Trading Economics.com