Guess what’s keeping the lights on across Europe?


It looks like Santa is delivering coal to all of Europe this year!

EU energy ministers agreed to trigger a cap if the price of month-ahead natural gas futures contracts on the Dutch Title Transfer Facility (TTF) — the bloc’s benchmark gas exchange — exceed €180 ($191) per megawatt hour for more than three consecutive working days. 

The month-ahead TTF price must also be €35 ($37) higher than a reference price for liquified natural gas (LNG) for the same period for the cap to be activated. Prices for LNG — a chilled, liquid form of gas that can be transported via sea tankers — are tightly linked to prices for Europe’s natural gas delivered by pipelines.

As this is a political deal, it doesn’t bear scrutiny in the real world. Analysts and traders remain concerned that the mechanism could backfire –— causing prices to rise and worsening potential supply shocks. Germany, the bloc’s biggest economy and one of its largest importers of natural gas, had been the most notable holdout before Monday’s announcement. 

Gas traders would likely liquidate short positions and stop selling futures if they fear the break could be activated imminently, for fear of the resulting losses,” said analysts at Eurasia Group.

Meanwhile, Asia also needs natural gas and is prepared to pay more than the European capped price. Naturally, the suppliers will redirect their gas to Asia. Leaving Europe high and dry – and very, very cold. Thank goodness they were slow to shut down all their old coal power plants

Not in the EU but dealing with supply issues, failure renewables and rising gas prices – The UK

UK Ministers deliberately shut down the vast majority of the UK’s cheap and reliable coal-fired power stations – and then demolished them. Now we have rocketing prices, widespread fuel poverty, risks of power cuts, and a system of energy rationing on the way.