The European Agency for the Cooperation of Energy Regulators (ACER) revealed, on Tuesday 22 October, in its third quarterly review of the main developments on the wholesale gas markets in Europe, as part of its Market Monitoring Report (MMR) 2024, that Europe avoided severe gas price volatility in the third quarter of 2024.
Although wholesale gas prices increased during this period, they remained effectively less volatile than last year due to increased Norwegian supply, high storage levels and a low demand, slightly lower than in 2023.
These factors have helped to moderate the pressure on prices resulting from a tighter global market for liquefied natural gas (LNG) and geopolitical instability.
The report then reveals that EU gas imports (pipeline and LNG) fell year-on-year in the third quarter (-23% for LNG imports), continuing a trend observed throughout 2024.
This quarterly review also focuses on changes in cross-border gas transmission tariffs, which currently have a relatively small impact on price formation, but whose influence is expected to grow.
More tariff increases are expected in the near-term, warranting monitoring of the effects of tariff changes on cross-border trade and market integration.
In addition, the report states that the increase in renewable energy production has saved 25 TWh of gas compared with the third quarter of 2023.
“This lowered carbon emissions, loosened the EU gas demand-supply balance and reduced instances of gas setting marginal prices in electricity markets”, ACER said.
Among the challenges highlighted by the report, the end of the agreement for the transit of Russian gas via Ukraine, which expires at the end of the year, will require alternative supply routes to be found for the security of supply for Central Europe.
In addition, the analysis indicates that the EU could face increased competition on LNG markets in 2025, “potentially driving up wholesale gas prices”.
The next ACER update on European wholesale gas markets will be published in early 2025.
To see the report: https://aeur.eu/f/dze (Original version in French by Pauline Denys)