Q1 2024Energy Market Insights
Pricing worries ease, but Geo-Political tensions continue.
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Energy Prices Easing
At the end of Q1 2024, we have seen pricing on wholesale Energy Markets continue to ease as key factors continue to improve from the heights of the crisis. European Gas storage is strong, somewhat ahead of recent years of the energy crisis, while domestic wind generation continues to improve, outpacing slight increases in Gas pricing. The price of Gas whilst still double pre-crisis levels, is showing early signs of easing & stability returning to markets in 2024.
Competition for LNG
However, key market risks are not going away. The demand for LNG supplies which sees cargo ships criss-cross the globe to find the best price still mean European and Asian markets continue to be very reliant on gas as a key generator of electricity. Recent indicators suggest that gas demand and prices have been ticking upwards in Asia of late and European buyers will need to remain competitive throughout refilling season to reach the EU mandated storage target.
Geo-Politics
There are several conflicts raging in the world now which are an obvious concern. The war in Ukraine passed its second anniversary in the first quarter 2024, with no immediate sign of a ceasefire or resolution. Energy continues to be a key weapon in this conflict and energy infrastructure has been a regular target there. The fear of the spread of war throughout the Middle East is very real. This could further impact trade along the key Suez Canal route.
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International trade routes impacted by climate change
As well as the Suez Canal route, another key route for international cargos is the Panama Canal. This is arguably a more critical route for the supply of LNG to Europe, as a large volume of US cargos pass through the canal every year. Drought, linked to climate change, saw water levels in the Panama Canal fall drastically in 2023. Daily crossings through the canal have fallen by more than 30%. Operators hope that traditional wet season rains, usually beginning in May, will bring the levels of rainfall needed to take daily crossings back to full capacity.
Renewables key for growth
Wholesale energy prices remain at least 1.5 times the levels of 2020 and perhaps the new norm is at these levels. Accelerated investment in renewables is key to meet the growing demand for clean green electricity to support economic growth and reduce energy costs. Early reports show that 25% of European generation is via Wind and Solar, with 40% of local generation coming from Wind in Ireland. However, Solar has someway to catch up in Ireland.
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Demand for electricity is up 3% year on year in Q1 and shows no signs of reversing on the back of a strong Irish economy.
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April 2024
Powering energy transitio | Page 6
Energy Markets Q1 Review
Q1 - Energy Market Insights | Page 7
Energy Markets
Key Themes for Q2 2024
April 2024
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Q1 - Energy Market Insights | Page 9
Energy with insight | Page A The contents of this report are provided solely as an information guide. The report is presented to you “as is” and may or may not be correct, current, accurate or complete. While every effort is made in preparing material for publication no responsibility is accepted by or on behalf of New Measured Power Limited T/A Pinergy for any errors, omissions or misleading statements within this report. No representation or warranty, express or implied, is made or liability accepted in relation to the accuracy or completeness of the information contained in this report. New Measured Power Limited t/a PINERGY reserves the right at any time to revise, amend, alter or delete the information provided in this report. Suite 1, Beaver House, Beech Hill Office Campus, Clonskeagh, Dublin 4, D04 Y8X5 pinergy.ie Nathan O’Sullivan Financial Analyst - Energy Markets Powering energy transition
