Europe’s energy system suffers from cold snap

Forecasts show that temperatures are going to drop below freezing from London to Latvia in the coming days. It's the first real trial of the season for Europe s strained power and gas network, with wind power slumping and nuclear output in Sweden and France hobbled by outages. Ole Hansen, head of commodity strategy at Saxo Bank A S, said the continent's gas storage levels have fallen to about 90% full, from almost 96% in mid-November due to the cold blast driving up demand for heating and clear blue skies. There has been additional outages at facilities in Norway because of the cold snap.

Europe is importing record volumes of liquefied natural gas as lower pipeline flows from Russia exacerbate the crisis. Trades are closely watching activity in China because of the loosening of Covid-related restrictions that have crimped energy demand. Peter Heydecker, executive director of trading at German energy company EnBW, said Germany has one of the highest prices for LNG now, and that has helped to attract cargoes. We have a lot of room to fill, but we also have a huge need. We still see enough LNG coming, but that can change quickly and we need to keep an eye on Asia s demand. Dutch front-month futures, the European benchmark, traded 4.5% higher at €156 per megawatt-hour by 10: 04 a.m. in Amsterdam. The equivalent contract in the UK rose 5.4%.