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TTF hike raises concerns over perceived ‘return to normality’

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A steady rise in the TTF index over the past few days, following more than a year of decline, has market players concerned about the direction natural gas prices could take for the rest of this year.

The TTF, Europe’s gas benchmark, had fallen to as low as 23 euros per MWh a few weeks ago but has now rebounded, reaching a level of 28 euros per MWh yesterday. Gas futures dated December, 2024 and onwards are currently priced at over 30 euros per MWh.

The rising trend comes following a very mild winter of low consumption, which, however, was higher compared to last year.

Market players do not appear to be fully convinced by Europe’s extension of measures aiming to reduce demand for yet another year, until the end of next winter.

The recent insecurity that has crept into the market appears to stem from Europe’s anticipated loss of Russian gas imported via a Ukrainian corridor. A five-year pipeline gas transit agreement between Kyiv and Moscow for Russian gas supply to Europe via Ukraine expires at the beginning of 2025. Ukraine has declared it does not intend to renew this agreement.

This bilateral agreement’s end is expected to reduce the EU’s total gas imports by 5 percent. The loss will need to be offset by an increase in LNG shipments.

Unfavorable news from across the Atlantic has further unsettled market players. Natural gas producers such as EQT have decided to reduce output as a result of extremely low gas prices in the domestic market.

The downward trajectory of the TTF in recent months was driven by weak demand in Asia, including China, a trend whose continuation cannot be depended on. Also, the EU cannot count on next winter being as mild as the previous two winters.

 

Global supply chain under pressure, PV sector impacted

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The global supply chain is under pressure as numerous container ships have been rerouted around southern Africa to avoid the Suez Canal as a result of attacks on vessels on the western coast of Yemen by Houthi rebels, aligned with Iran and declaring they have attacked ships in response to Israel’s bombardment of Gaza.

The situation, potentially adding three to four weeks to product delivery times, also spells trouble for Europe’s solar energy sector, officials have told energypress.

Though the PV sector is currently enjoying record-low cost for equipment, the drama unfolding in the Red Sea and at the Suez Canal threatens to greatly impact the global supply chain and alter favorable conditions currently benefiting the PV sector.

The European market’s PV needs are mostly covered by Chinese manufacturing. Any disruption to transportation routes would result in sector shortages on the continent.

PV officials in Europe are already warning the current rerouting of numerous container ships could increase market pressure for solar panels in the coming months.

European energy storage startups on rise despite costs

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Energy storage, a key factor in the effort for a green, carbon-free transition, entails high cost as most current storage solutions depend on lithium-ion batteries, which are powerful but relatively expensive.

This high cost, as pointed out by the Financial Times’ sifted.eu, has restricted the ambitions of some companies, but others are putting energy-storage technology to good use.

For example, Polarium – a startup in Sweden’s booming battery industry – provides lithium-ion backup power to the telecom and commercial sectors. The company notes its ability to efficiently convert DC power generated by solar panels into AC power required by most devices is its unique selling point.

Dozens of companies are looking beyond lithium, according to the sifted.eu report. This trend has increased since last year’s sharp rise in raw materials for lithium.

Investment in new batteries in Europe is forecast to reach 30 billion euros by 2030 as the continent prepares for a renewable energy future.

The search for a stable, cost-effective lithium alternative is widespread. Startups including France’s Tiamat are making salt-based batteries. Sodium, next to lithium on the periodic table of the elements, is not only similar, but more abundant and cheaper.

On the other hand, the energy density of sodium is relatively low, which means that batteries using salt need to be larger and heavier than their lithium counterparts.

Europe faces tough opposition in the energy storage sector. China dominates lithium-ion production and is making efforts to dominate the sodium-ion supply chain.

US battery manufacturers, meanwhile, can receive significant tax credits – up to 30 percent of system installation costs, courtesy of the Inflation Reduction Act (IRA) supporting climate investment. Manufacturers can also benefit from a 20 percent bonus available if certain requirements are met, such as the use of household components.

Regulatory stability is critical to ensure the scaling up of capital-intensive energy storage projects. However, vague definitions of energy storage have led to some confusion about whether it is a consumer or producer of electricity. And this often leads to double taxation.

On the positive side, this sector offers tremendous potential and is attracting investors. Venture Capital funding in European energy storage is up 7 percent in 2023 compared to 2022.

 

 

EU adequately prepared for winter ahead, ACER notes

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The EU is adequately prepared to cover its energy needs this coming winter, despite the effects of prolonged efforts that were needed last winter to overcome unprecedented challenges, data provided by ACER, Europe’s Agency for the Cooperation of Energy Regulators, has indicated.

The EU’s gas storage facilities are already 90 percent full, two months ahead of a November deadline.

Also, in the first two quarters of 2023, a target set for a 15 percent reduction in gas demand was achieved, while LNG import capacity has expanded by 20 percent, with the global market remaining well supplied, courtesy, in part, to limited demand growth from China.

Increased LNG imports and reduced demand have been key parts of the EU’s energy-crisis strategy.

LNG imports into the EU-27, as a percentage of overall natural gas imports,  doubled from 20 percent in 2018-2019 to 40 percent between August, 2022 and July, 2023. This percentage rise has been greatly attributed to LNG imports from the USA, up six-fold to 600 TWh.

Furthermore, solar, wind and pumped-storage energy solutions are being developed at a faster pace and contributing, slowly but steadily, to Europe’s reduced reliance on natural gas.

Despite the overall progress, Europe cannot afford to become complacent. According to Brussels-based economic think tank Bruegel, energy shortage fears have subsided but prices remain high.

Also, ongoing global instability could impact the industrial sector and the EU economy, the think tank warned.

The global LNG market, and, by extension, the natural gas market, will remain tight until more liquefaction plants come into play, Bruegel noted.

Encouragingly, new US LNG facilities to offer an annual capacity of 336 TWh, equivalent to half the EU’s LNG imports from Russia, are planned to begin operating in 2024.

LNG facility strikes in Australia raise European concerns

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Strike action at three LNG facilities in Australia, a key player in the global LNG market, has raised concerns in Europe as the ongoing dispute between employers and employees could have a significant impact on global gas supply and, by extension, the price of the Dutch TTF futures contracts.

The strike action, taking place at facilities that account for roughly 10 percent of global supply, has destabilized the European natural gas market over the past few weeks.

Europe needs to prepare for the possibility of further instability and price rises as it remains unclear how the ongoing dispute at the LNG facilities in Australia will play out, the Institute for Energy Economics and Financial Analysis (IEEFA) noted in a report.

North West Shelf, an LNG facility run by Woodside Energy, and two Chevron-run facilities, Gordon and Wheatstone, could be affected by the ongoing strike action, IEEFA warned. All three facilities, combined, represent roughly 10 percent of global LNG supply.

Australia, along with Qatar and the USA, represent nearly 60 percent of global LNG supply. Although the majority of Australian LNG exports are destined for Japan, China and South Korea, the disruption caused by the strikes will lead to Asia and Europe competing for LNG.

Focus on germanium, antimony mining, vital mineral resources

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The Greek government, along with its Ministry of Environment and Energy, is placing significant emphasis on harnessing the potential of the country’s mineral resources, with particular attention directed towards the utilization of germanium and antimony elements, both vital for industry and the energy transition.

Rockfire Resources plc, a UK-based exploration company focusing on precious metals, base metals, and critical minerals – its subsidiaries include Hellenic Minerals I.K.E. – revealed last year that it had identified germanium deposits at the Molaoi mine in southeastern Peloponnese. The company is currently awaiting EU funding to progress with the development and utilization of these resources.

The European Union’s Environment Agency has identified germanium as one of the top 20 raw materials considered critical metals by the European Commission, given the potential risk of supply shortages.

Germanium is an important semiconducting material, while its compounds are used, among other things, for telecommunications optical fibres, as polymerization catalysts and in photovoltaics, while it is also widely used in various sectors of the chemical industry and metallurgy.

Germanium holds significant importance as a semiconducting material. Its compounds find application in diverse areas, including telecommunications optical fibers, photovoltaics, and serve as polymerization catalysts. Furthermore, germanium plays a crucial role in various sectors of the chemical industry and metallurgy.

As for the country’s antimony deposits, Greece possesses great potential, Theodoros Skylalakis, the Minister of Environment and Energy, highlighted at a recent EU energy council meeting.

The EU is willing to support European antimony extraction efforts as 87 percent of the world’s production of this mineral resource hails from China.

Antimony is used in the production of refractory materials, dyes, as well as in the glass industry, batteries and semiconductors.

Deputy Minister of Environment and Energy Alexandra Sdoukou, speaking at a recent conference titled “Greek specific issues: new raw materials industrial projects in Greece”, announced the launch of a tender for the lease of a mining site in order to determine the existence and exploitation of antimony, a mineral included in all EU lists from 2011 to date as a critical strategic metal.

Polysilicon, transportation price drops boost for PV sector

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Falling prices for polysilicon, the basic material that goes into the making of solar panels, have dropped to a three-year low, helping offset higher interest rates faced by PV investors, a development expected to help the PV sector rebound, especially from September onwards, market players have told energypress.

Polysilicon price levels have fallen to levels last recorded in the summer of 2020, leaving behind price peaks of recent months that had made solar energy project business plans unsustainable.

China, a leader in the production of polysilicon, controls this market’s trends. Its polysilicon prices have been on a downward trajectory in recent times, falling to 8.54 dollars per kilo last week, the lowest level over the past three years, according to market data published by PV magazine.

As a result, the cost of solar panels has fallen from 30 cents per watt in 2022 to less than 20 cents per watt at present.

Besides descending polysilicon prices, a big reduction in transportation costs, down to one-fifth of prices recorded just recently, has also helped lower the cost of solar panels.

 

Natural gas price spike prompts new market alert

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News that the Netherlands intends to soon stop production at Groningen, one of Europe’s largest gas fields, as a result of earthquake-related risks, pushed gas prices up by 28 percent yesterday, not surprising, as Groningen is a key gas source for countries in Europe’s west.

The development has made even more urgent the intention of Greece and Spain, along with other EU member states, to reestablish a common front as protection against the outbreak of any new energy crisis.

This group plans to request the continuation of a windfall earnings recovery mechanism in the wholesale electricity market when EU energy ministers meet on Monday to discuss a new structure for the bloc’s energy market.

The Dutch TTF benchmark has risen 113 percent over the past 15 days, from 23 euros per MWh to 49 euros per MWh yesterday, before easing off to 39 euros per MWh.

A temporary disruption of operations at some of Norway’s gas fields has unsettled European markets. Though production at these Norwegian gas fields will soon be normalized, the Netherlands have yet to reach a final decision on the country’s Groningen gas field. However, it is expected to continue producing should a new energy crisis hit Europe or if its upcoming winter is a cold one.

At this stage, ambiguity prevails as it remains unclear if Europe’s natural gas market finds itself at the onset of a new upward trajectory.

A sudden increase in LNG demand in Asia as a result of China’s post-pandemic return to full production is another major concern for European energy market players. Such a development promises to escalate prices.

 

Europe falling behind North America in energy transition race

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Despite taking the initiative, back in 2010, for action against the climate crisis, Europe has since lost plenty of ground and now lags behind North America in the energy transition race as a result of a lack of measures and incentives to attract related investments.

Evangelos Mytilineos, president and CEO at the Mytilineos group, as well as president of Eurometaux, Europe’s association for non-ferrous metals producers and recyclers, has pointed out this widening gap that separates Europe and North America.

The USA is subsidizing the cost of energy transition projects at a level of 20 percent, while Canada’s subsidy support reaches 30 percent.

Such investment support for energy transition projects is sorely lacking in Europe, more focused on setting goals and proposing actions such as the Critical Raw Material Act, intended to ensure the EU’s access to a secure, diversified, affordable and sustainable supply of critical raw materials.

Europe’s approach is failing to attract investors, and, even more crucially, energy-intensive industries, Mytilineos pointed out. Many are relocating their headquarters to Asia and the USA.

Energy cost is a key factor behind such decisions. Even now, natural gas prices in the EU, which have de-escalated, remain five times higher than in the USA.

Europe was particularly fortunate last winter as a result of lower temperatures, energy savings, the absence of China from markets, and restricted energy demand in the Far East. However, this fortune has begun changing as energy prices in the Far East are now beginning to exceed European prices. LNG tankers are heading back to Asia in increasing numbers.

The Mytilineos group’s chief forecast the USA would recover from the energy crisis sooner than Europe. Canada, also recovering faster, recently lured the Mytilineos group for a 1.16 billion-euro solar energy portfolio acquisition.

Delayed European decisions, held back by greater bureaucracy and the time-consuming need for approvals by all member states, will leave the continent well behind North America in the energy transition race, Mytilineos noted.

Europe favorably placed ahead of next winter’s gas storage refill

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Favorable conditions last winter have placed Europe in an advantageous position of being able to fill, to full capacity, its natural gas storage facilities even if Russian supply is completely cut off.

Europe needs to store away approximately 35 billion cubic meters of natural gas between now and the end of October, well below the average figure of roughly 55 bcm over the past decade, in order to fill its energy storage facilities at 90 percent of capacity, the European goal set for next winter.

A year ago, Europe needed to purchase approximately 70 bcm of natural gas to fill its storage facilities. This was one of the factors that pushed prices up to all-time highs.

Fortune went Europe’s way last winter as temperatures remained mostly mild, significantly subduing energy usage, while China’s zero-Covid policy enabled the continent to import substantial LNG quantities which, otherwise, would not have been available.

As a result of these factors, Europe’s gas storage facilities were left 55 percent full by the end of last winter, well above the previous decade’s average of 33 percent.

Despite the favorable news for Europe, the market remains susceptible to dangers as a result of increased natural gas usage in the industrial sector and revitalized demand in Asia, factors that have led analysts to forecast a wholesale gas price rebound that could exceed 100 euros per MWh.

Also, the milder weather conditions could have negative impact in the long run. Low rainfall and snowfall in many parts of Europe could lead to a hot and dry summer, increasing energy demand for cooling purposes, and prices. This could make Europe’s energy-storage refilling effort slightly more challenging.

Analysts expect new round of gas price increases this year

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Analysts are projecting an eventual rise in gas prices over the next few months as a result of the combined effect of several factors, the main one being Europe’s almost entire dependence, these days, on imported LNG.

This LNG dependence, following Europe’s drift away from Russia, along with Europe’s limited LNG gasification infrastructure, until at least 2025, will inevitably lead to price increases at some point in 2023, analysts have noted.

Natural gas prices have been falling in recent times and are expected to, once again, drop below the price level of coal. This price descent, analysts believe, will reignite industrial activity in Europe, boosting gas demand.

Also, Chinese production, currently operating at below full capacity as a result of the country’s strict adherence, until recently, to a zero-Covid policy, is also expected to get back into top gear within 2023.

In addition, if Europe avoids recession, then global gas orders will skyrocket.

Taking these factors into account, Europe needs to maintain links with pipeline gas supply if energy security is to be ensured on the continent, analysts have noted.

This highlights the significance of projects such as the East Med gas pipeline plan, now seeming to be back in favor. It promises to connect Israel, Cyprus and Greece, over a total distance of 2,000 kilometers, before crossing to Italy via the Poseidon pipeline, a 210-kilometer stretch.

TTF drop over, gas prices on the rebound, analysts forecast

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Natural gas prices, up 20 percent over the past week on levels that had plunged to less than 65 euros per MWh in the last month, are establishing a new upward trajectory, market experts believe.

Colder weather anticipated around Europe over the next few months, a slight drop in gas storage facility reserves around the continent, as well as slightly higher prices offered by Asian buyers, already attracting some LNG shipments to China, now moving again after letting go of its zero-Covid policy, are the key factors seen putting an end to the recent decline in gas prices.

The combined effect of these factors is expected to maintain natural gas prices at levels of between 70 and 80 euros per MWh. Natural gas was priced at 74.80 euros per MWh on the TTF index yesterday, a rise based on expectation rather than any substantial change in current market conditions.

Natural gas storage capacities in Europe have now dropped to an average of 83.5 percent after reaching levels of 95.5 percent of capacity in November.

Though gas prices are currently roughly 40 percent below levels of 120 to 130 euros per MWh recorded this time last year, market volatility is expected to remain a concern in 2023, market analysts told energypress.

Price levels, they have forecast, will soon climb back up to levels of more than 100 euros per MWh before falling again next autumn, when gas storage facilities have been refilled to 90 percent of capacity.

Natural gas prices tumble to 12-month low, crucial period still ahead

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European natural gas prices tumbled to 65 euros per MWh yesterday, a new 12-month low last reached in mid-January, 2022, prior to Russia’s invasion of Ukraine.

The price drop has been attributed to mild European winter conditions, so far, that have flattened demand and kept the continent’s energy storage facilities 84 percent full, well above the level recorded a year ago and approximately 30 percent higher than the average level recorded over the past five years.

Analysts insist European market conditions remain fragile, despite the favorable price trajectory of natural gas so far this winter. A sudden change of weather conditions, combined with a complete disruption of Russian gas supply to Europe, could spark a new round of price volatility and deplete European gas reserves by the end of winter, analysts have warned.

The European energy market, experts have long pointed out, will face its toughest test in spring, when EU member states will begin efforts to refill their gas storage facilities in preparation for the winter of 2023-2024.

This refilling period could once again spike natural gas prices to levels of 120 euros per MWh, analysts have noted. Russian pipeline gas supply is expected to be considerably lower in spring, while the LNG market, on which Europe now greatly depends, is expected to be tight in spring.

A worst-case scenario for Europe would combine a complete disruption of Russian natural gas supply with an increase of LNG demand in the Chinese market. Such a combination would prompt a natural gas shortage estimated to reach as much as 57 billion cubic meters, or 15 percent of projected demand.

Latest energy price surge reawakens market concerns

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Energy market prices are on the rise again, serving as an unpleasant reminder of the upward trajectory experienced in previous months. Wholesale natural gas prices are no longer in double-digit territory, as was the case in recent weeks, but have rebounded to levels of approximately 150 euros per MWh, while wholesale electricity has surged to 330 euros per MWh over the past few days.

If this trend continues, then retail prices to be paid by consumers for energy from January onwards, the heart of winter, will be pushed up.

European authorities and consumers had felt some relief as a result of mild late-autumn weather around the continent, which helped subdue energy prices in November. But fears are now been reawakened following the latest surge in energy prices.

Two key factors, both hard to predict, are now at play and will influence energy prices in Europe. The duration of China’s deeply unpopular lockdowns, subduing energy demand in China, is one factor. Europe’s ability to keep energy storage facilities filled for as long as possible is the other factor. Both these factors will determine the duration and intensity of the new upward trend in energy exchanges.

Consumers in Greece can expect to be charged among Europe’s lowest retail electricity price levels in December, as the current month’s prices are shaped by the country’s month-ahead model, requiring all suppliers to declare prices for each forthcoming month by the 20th of the preceding month.

December’s retail prices were set by suppliers on November 20, when wholesale electricity prices were down to levels of between 115 and 120 euros per MWh. It remains to be seen what lies in store from January onwards.

 

International gas prices lowered by favorable conditions

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More favorable market conditions of late have prompted a de-escalation of international gas prices, currently on a downward trajectory. This morning, the international price for natural gas reached as low as 107.355 euros per MWh, a new four-month low.

Market officials explained that LNG is currently available in abundance with some tankers unable to secure delivery destinations as Europe’s storage facilities are close to full.

At the same time, demand for Russian gas in Asia, primarily China – where Russia has turned to as a result of restricted exports to Europe – has fallen significantly. Mild weather conditions in Europe at present have helped contain demand for gas.

This gas price drop will not become fully apparent in the retail market until mid-November – unless a new price surge is experienced – as prices are set based on the previous month’s prices.

LNG order costs fall as much as 40% below TTF prices

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The cost of LNG orders placed in recent days has fallen 10 to 40 percent below levels at the Dutch TTF exchange, driven lower by fine weather around Europe and subdued demand in Asia as a result of lockdown restrictions imposed over the past two months by authorities in China, insisting on a zero-Covid policy.

LNG price levels are also lower at the TTF exchange, easing to levels between 93.5 and 94 euros per MWh, the lowest since February.

Market pressure has also eased as a decision by Ukraine to disrupt a pipeline supplying Russian gas to Europe has had less negative impact than initially feared.

Ukraine’s decision, believed to have been taken to pressure the West for stricter sanctions against Russia, prompted Russia’s Gazprom to find a bypass solution through alternative routes to the EU.

These developments could lead to a significant reduction in wholesale electricity prices as a result of less price pressure faced by electricity producers.

The duration of China’s lockdown will greatly shape LNG market developments. For the time being, LNG orders that had been intended for China are being redirected to Europe.

Though supply to Asia has fallen considerably from high levels recorded just months ago, LNG demand typically increases in China, Japan and South Korea during summer.

 

EU headed for joint energy supply plan, challenges faced

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The EU appears headed towards adopting a strategy for joint supply of natural gas, LNG and hydrogen, along the lines of a policy implemented for joint Covid-19 vaccination orders at the height of the pandemic, to combat skyrocketing energy prices, a draft prepared ahead of tomorrow’s summit, bringing together the EU’s 27 leaders, has indicated.

Governments of Europe’s south, hit harder by the energy crisis, and European consumers across the continent are anticipating measures that can help contain sharply increased gas, electricity and oil prices.

The joint supply plan’s implementation would come as a bold initiative by the EU, taking steps to greatly reduce its reliance on Russian gas, but various obstacles will need to be overcome.

Joint energy orders will be far trickier for the EU to execute than the mass orders it had placed with pharmaceutical companies for Covid-19 vaccinations back in June, 2020, as the former are commodities traded in fluctuating markets.

LNG suppliers such as the USA, Qatar and Algeria would have to redirect to Europe quantities usually shipped to Asian markets at highly profitable prices. Also, the reaction of China, America’s number one buyer of LNG, remains unknown.

The joint-supply strategy would be combined with the establishment of an energy safety reserve, as the European Commission has ordered EU member states to fill underground gas storage (UGS) facilities to 90 percent of their capacities by November 1, in preparation for next winter.

This would resolve energy sufficiency concerns but currently elevated prices are an issue. Also, many European UGS facilities have, until now, been managed by Russia’s Gazprom. It remains unclear if the Russian gas giant would be legally obliged to abandon these facilities.

The joint-supply strategy has been on the negotiating table since last year but held back by disagreements.

 

 

LNG tankers reroute for Europe as prices soar on continent

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Natural gas prices in Europe, well over price levels in Asia, are prompting LNG tankers to reroute mid-voyage and head for Europe as the gas supply crunch on the continent worsens.

Buyers in Asian countries have outbid Europeans for LNG shipments for much of the year, but with storage now full across Asia, uncommitted cargoes from the Atlantic basin that were heading for Asia are being turned round by their owners and sent to Europe to cash in on soaring prices and demand.

The ships carrying liquefied natural gas to Europe include the first Australian LNG tanker headed for the continent in a decade.

American LNG exports are expected to rise significantly in 2022, surpassing quantities exported by Qatar and Australia.

According to US agency EIA, the Energy Information Administration, American LNG exports will rise to 11.5 billion cubic feet annually in 2022, 22 percent of projected global demand.

The US is expected to maintain the leadership in LNG exports until at least 2025, when Qatar is scheduled to launch an extension of its North Field gas deposit.

According to Reuters, 13 percent of American LNG exports in 2021 went to South Korea, 13 percent to China and 10 percent to Japan.

Three new gas liquefaction plants are planned to be launched in the US in 2022, by Cheniere Energy, Venture Global, and Tellurian.

 

Local PV market grounded by China’s sharply reduced output

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A drastic reduction in output of solar module panels by Chinese manufacturers, prompted by electricity shortages in the country as well as limited availability of PV materials, is heavily impacting RES sector investors in Greece.

Numerous local investors who had placed PV orders quite some time ago have been informed, by Chinese manufacturers, of delays for indefinite periods. Developers face the same problem.

PV prices have surge amid the extraordinary conditions making it extremely tricky, if not impossible, for Chinese manufacturers to price their products.

The energy crisis in China has forced the government to impose electricity consumption limits on industrial producers, which has hampered their operating capacity.

In response, many large-scale PV producers in China have chosen to suspend their operations, deeming as unfeasible the prospect of producing for a limited number of hours per day.

Five of the country’s PV producers, Longi, Jinko, Trina, JA and Risen, have issued a joint statement noting that, under the current conditions, their output cannot exceed 70 percent of capacity.

 

China shortages up PV prices, investment plans in jeopardy

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Solar panel prices have registered further price increases over the past week, driven higher by electricity shortages and higher coal costs in China, the world’s dominant solar module manufacturer.

The price escalation, decreased production and delivery delays are jeopardizing solar energy investment plans, including in Greece, where RES investors are in danger of missing crucial sector deadlines and face growing pressure because of the solar module price ascent.

The price of polysilicon, used as a raw material by the solar photovoltaic industry, rose by 8.6 percent in China, according to PV-Infolink, adding to the upward trajectory of the past month, which is forecast to continue.

In the Modules market, 360-370/435-445W Mono-facial Mono PERC prices were up 2.1 percent last week, while 182mm Mono-facial Mono PERC and 210mm Mono-facial Mono PERC prices rose by 2 percent.

As for glass, 3.2mm sheet prices rose by 3.8 percent and 2mm sheet prices increased by 5 percent.

PV-Infolink has projected further price increases next week, in excess of 3 percent, for all PV materials, except glass.

Solar module manufacturer Amerisolar, a US brand with production facilities in China, Taiwan and the USA, noted, in an announcement, that the current situation is expected to continue into October given the fact that China’s solar module production capacity is currently at just 50 percent.

Also, the delay in deliveries by Chinese producers is a concern ahead of the anticipated end-of-year spike in orders, a customary market trend.

 

Solar panel market hit by high prices, major delivery delays

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Transportation delivery problems from China, combined with a continuing rise in the cost of raw materials, are maintaining solar panel prices at elevated levels, and, even more crucially, leaving the market dry.

According to PVInfoLink data, current price levels for silicon, the basic component for solar cells, have risen by 300 percent since July, 2020.

Container shipping costs have increased by 350 percent since April, 2020, reaching 12,000 dollars per container, while, according to some forecasts, will soon reach 15,000 dollars per container.

These developments have created unfavorable and unprecedented conditions for investors seeking to develop solar energy parks as they are unable to find panels that could be delivered within reasonable periods, even at higher prices.

Investors who had not placed orders for solar panels in anticipation of further price reductions now find themselves in big trouble. This is especially so for investors who face nearing electrification deadlines for solar energy parks.

According to projections by international analysts, PV price levels are not expected to start declining until at least the end of the first half of 2022.

Demand levels for PV panels will remain high, according to analysts, as investment plans in Europe and around the world are continuously growing in scale, and, even more crucially, the Chinese and Indian markets are moving ahead fast.

Desfa-Gek Terna, Energean to S. Kavala UGS tender 2nd rnd

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DESFA-GEK TERNA and Energean Oil & Gas have advanced to the second-round, binding-offers stage of a tender offering use, development and operation of an underground natural gas storage facility (UGS) in the almost depleted natural gas field of “South Kavala”, while China’s CMEC-MAISON GROUP failed to qualify, privatization fund TAIPED has announced in a statement.

Following the signing of confidentiality agreements, the two qualifiers will be granted access to the tender’s virtual data room, where financial and technical data will be uploaded for due diligence procedures.

However, much work lies ahead before this project matures to enable the submission of binding offers. A number of regulatory issues remain pending, officials monitoring developments have informed, describing the project as complex and highly technical.

Pending issues include determining the percentage of the UGS’s capacity to be regulated for pre-determined earnings, and the percentage of capacity whose earnings will be shaped by market forces. The regulatory period and WACC level also need to be decided and set.

Given these tasks, as well as obstacles raised by the pandemic, binding offers are not expected to be submitted any sooner than late-2021. The final stage of this tender appears most likely to take place early in 2022.

Chinese firms barred from distribution operator sale

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Conflict of interest, including in grid energy storage, a fast-growing market, has prompted power utility PPC to stop two Chinese firms interested in the prospective sale of a 49 percent stake in distribution network operator DEDDIE/HEDNO, a PPC subsidiary, from taking part.

State Grid Corporation of China (SGCC), a strategic partner of Greek power grid operator IPTO with a 24 percent stake, and another Chinese company, still undisclosed, both participated in a market test for the DEDDIE/HEDNO privatization, indicating an interest to submit bids.

A total of 19 firms reportedly expressed preliminary interest in the sale’s market test, conducted by the procedure’s consultants.

The DEDDIE/HEDNO partial privatization’s conditions include a term barring the participation of any firms directly or indirectly related to IPTO.

The conflict-of-interest term was included in the sale’s rules as electricity network companies, whether involved in high voltage, such as IPTO, or mid and low voltage, such as DEDDIE/HEDNO, are expected to find themselves competing in various electricity market services, including energy storage.

The grid energy storage market – offering large-scale storage systems that store electrical energy during times of abundance, low prices, or low demand before returning it to the grid when demand is high and electricity prices tend to be higher – is experiencing rapid growth on a global scale.

Greece still lacks a legal framework covering this domain. The energy ministry is working on this pending issue, crucial for the country’s effort to achieve National Energy and Climate Plan objectives through greater RES penetration.

This legal framework will, amongst other matters, determine market participation and remuneration terms for energy storage units, as well as related services to be traded on the energy exchange.

PPC anticipates first-round expressions of interest from four to six consortiums for the DEDDIE/HEDNO sale of a 49 percent stake.

 

PV market faces severe shortage, higher prices and shipping costs

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Solar panel supply has dried up in the Greek market, as is also the case throughout Europe, creating difficulties for PV investors, big and small, who are seeking to develop solar parks ahead of RES auction deadlines or to secure non-auction tariffs.

The solar panel market shortage has been attributed to a significant increase in PV installations, both globally as well as in China, essentially the world’s sole PV producer.

Investors already committed to tariff contracts are subject to major solar panel delivery delays, while others now making efforts to purchase equipment needed to develop their solar parks are unable to find delivery dates any sooner than the third quarter of 2021.

Besides the market shortage of solar panels, shipping containers from China have also been hard to come by, possibly as a result of a sharp increase in the trade of electronic goods during the pandemic, prompting higher transportation costs.

Solar panel prices have also risen considerably, compared to levels last summer, which has caused business plan issues for prospective green-energy producers.

China has announced a five-year PV installation plan to run at an annual rate of 65 GW from 2021 to 2025. Also, global PV demand is soon expected to reach 200 GW, annually.

Quite clearly, solar panel production, for the time being, cannot meet demand. This shortage is expected to last until at least the end of the first half in 2021.

 

 

 

JinkoSolar sole PV firm given top rating for credit quality in Chinese market

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JinkoSolar, one of the largest and most innovative solar module manufacturers in the world, is the sole PV company to be given the highest AAA rating for credit quality in the Chinese market, the company has announced in a statement.

This highest rating stands as recognition of market quality credit management capabilities and levels of a company, through a comprehensive evaluation of company credit, quality assurance capabilities, market operation capabilities and other
indicators, conducted by the China Association for Quality (CAQ).

With this recognition, JinkoSolar sets a new company milestone and benchmark for the rest of the PV industry in terms of user satisfaction and quality management, it noted in the statement.

Leveraging the company’s leading intelligent manufacturing process and product quality, JinkoSolar has become a highly respected name in the global PV industry, it added.

JinkoSolar has been awarded numerous international quality certifications, and its outstanding reputation has contributed to
positioning Chinese manufacturers as some of the most dominant players in the global PV industry beyond China.

Based on its product innovation, supply stability and a well-established global service network, JinkoSolar has been ranked first in terms of global shipments for four consecutive years.

“We will continue to focus on the R&D of our core technologies, and upgrade and optimize production lines to improve the quality of our PV products,” said Kangping Chen, Chief
Executive Officer of JinkoSolar. “In order to further promote development towards grid parity, we will focus our efforts on product iteration and continue to bring premium quality products to our global customers that will reduce costs and improve system efficiency. In the future, we will continue to assume the responsibility of a leading PV company, bringing to
market more optimized PV products, and strongly support the global transformation to clean and green energy and drive the high-quality development of the global solar industry.”

RAE to set DEDDIE’s WACC level this week, investors keen

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The launch of a privatization procedure to offer a 49 percent stake in distribution network operator DEDDIE/HEDNO should be brought one step closer to its actualization this week as RAE, the Regulatory Authority for Energy, is expected to set a WACC level for 2020, before following up, a few weeks later, within December, with a WACC level covering 2021 to 2024.

These steps are intended to offer investors clarity on the operator’s earning potential.

The distribution network operator’s WACC level for 2021 to 2024 is expected to be set at just below 7 percent, a highly attractive level given the far lower yields offered by respective European distribution network operators.

Investor interest in the forthcoming DEDDIE/HEDNO sale is currently high, energy ministry sources informed. Though no companies were specified, the sources indicated that potential buyers who had surfaced prior to the pandemic remain interested.

Germany’s EON, Italy’s Enel, France’s Enedis and a number of Chinese firms had all expressed interest. Surprise additions to this list cannot be ruled out.

A market test, to measure the level of interest of prospective bidders, is expected to take place next month, immediately following an Investor Day online event planned by state-owned power utility PPC, the operator’s parent company, for early December, energy minister Costis Hatzidakis told a recent energypress conference.

DEDDIE/HEDNO, possessing networks covering 242,000 kilometers, has prepared a major investment plan that includes installation of 7.5 million smart power meters, a project budgeted at 850 million euros, and a digital upgrade of the network. The operator’s assets are valued at 3.6 billion euros.

PV panel market shortage, higher prices affecting investors

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Greece’s solar panel market, reflecting challenging sector conditions that have emerged throughout Europe, faces severe shortages and price increases of between 15 and 20 percent, compared to just a few weeks ago.

The challenging situation has led to major project delays. Investors holding purchase agreements for PV equipment are being delayed by weeks for their order arrivals, while others still working on agreements cannot find suppliers offering anything better than delivery by May, 2021, at the earliest.

Some buyers requiring just small orders of solar panels have been lucky enough to land agreements as a result of order cancellations and other irregularities, but, in general, the shortage is prevalent.

Though the adverse conditions are impacting all PV investors, small-scale players are particularly feeling the pinch as they face deadlines to secure tariffs through non-competitive administrative decisions. Making matters worse, the energy ministry has indicated it will reduce non-auction tariff prices.

Pundits have attributed the shortage of PV panels to a significant increase in the number of installations at an international level, including China, nowadays virtually the world’s only producer of solar panels.

Chinese officials have announced a plan to aim for the installment of 65 GW of PV systems, annually, over a five-year period beginning in 2021.

Quite clearly, current PV panel production levels cannot meet global demand. This squeeze is expected to continue until at least the end of the first half of 2021.

Demand for glass has increased as bifacial PV panels now dominate the market, but the pharmaceutical industry, also absorbing large quantities of glass, has priority amid the pandemic.

The sharp increase in the demand for glass has prompted a price increase, for this material, of as much as 71 percent.

South Kavala UGS bidders talk formations as deadline nears

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Prospective bidders of an upcoming tender to offer an underground natural gas storage facility (UGS) license for the almost depleted South Kavala offshore natural gas field in the country’s north are deliberating over possible partnerships as the October 19 deadline for official expressions of interest approaches.

Greek gas grid operator DESFA, Energean Oil & Gas and GEK TERNA will participate in the tender, according to enegypress sources, while some market officials believe a Chinese company, not yet revealed, is also interested.

All three Greek companies have remained tight-lipped on possible partnership formations for the tender. GEK TERNA and Energean Oil & Gas are believed to be discussing the prospect of teaming up, while DESFA and the Chinese company will most likely enter the tender alone, energypress sources informed.

The tender, staged by privatization fund TAIPED, will offer rights for the use, development and exploitation of the virtually depleted offshore natural gas field south of Kavala as a UGS facility for a period of up to 50 years.

Investments needed for the project’s development are estimated between 300 and 400 million euros.

The field is located approximately 6 kilometers from the west coast of the island Thasos, in the North Aegean Sea, at a depth of 52 meters.

Its development into a UGS facility promises to contribute to Greece’s energy security and that of southeast Europe.

Flight reconnections, geopolitics key for IPTO sale rescheduling

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Rescheduling details of a privatization plan for the sale of an additional stake in power grid operator IPTO will depend on the restart of the Athens-Beijing flight route, the reestablishment of face-to-face contacts blocked by the pandemic, as well as a reduction in geopolitical tension between China and the west.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Skillful diplomacy will clearly be needed to overcome any EU and US objections to an increased SGCC share in IPTO. Video conferences would prove insufficient. Greek foreign ministry officials will need to make at least one trip to China for related talks.

Greek governmnent officials intend to travel to Beijing for work on various matters following the summer, sources informed energypress. Bilateral issues have accumulated during the several months of lockdown. Many cancelled meetings need to be rescheduled.

More crucially, in the lead-up, the Greek side will need to prepare for these Beijng meetings by working through related matters with officials in Brussels and Washington.

Sale of further stake in IPTO delayed by pandemic’s impact

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A privatization procedure for the sale of an additional stake in power grid operator IPTO will not be able to resume for at least another two to three months as a result of the coronavirus pandemic’s negative impact on international markets, highly ranked energy ministry officials have told energypress. The ministry will wait for conditions to recover, the sources noted.

A legislative revision is needed to lift a restriction imposed by the country’s previous leftist Syriza government in 2016 not permitting the Greek State’s stake in IPTO to fall below 51 percent, the current stake held by the Greek State.

Though an amendment ending this restriction has been included in a draft bill covering environmental and RES matters, now headed to parliamentary committees for discussion ahead of ratification, considerable road lies ahead before the sale of a further stake in IPTO can take place.

IPTO’s strategic partner State Grid Corporation of China (SGCC), holding a 24 percent stake in the Greek operator, has expressed interest to boost this share. The Chinese company maintains first-offer rights in the event of a further sale.

Following his election victory last July, Prime Minister Kyriakos Mitsotakis, leader of the conservative New Democracy party, had announced a further stake of IPTO would be sold.

An official visit to Athens by Chinese president Xi Jinping last November added further impetus to the plan and earlier this year, deputy energy minister Gerassimos Thomas was planning to visit China for related talks.

However, talks between Athens and Beijing have remained stalled as a result of the pandemic.