2021 Review and 2022 Outlook

This editorial was written on December 21 – the day the filling level of German storage facilities was 56.8 per cent (data of December 19). At Malnow, physical flows were zero from 6am on December 21. For January, Gazprom Export booked only 8.3 GWh/h (200 GWh/day) firm capacity for January. In the morning, gas prices reached 160 euros/MWh “There is a real systemic risk here,” said the managing director of a trading house regarding the market situation. So far, the utilisation of the Norwegian export pipelines at a good 90 per cent has brought little relief; the utilisation of 40 per cent of the send-out capacity of the northwest European LNG terminals is not providing any relief either. RWE notified on the EEX transparency platform that in February the gas supply for the two gas-fired power plants Weisweiler and Gersteinwerk was endangered, as only interruptible transmission capacity was booked for the two plants. Also, the market area manager THE spent a whopping 50 million euros to secure an additional 5,000 MW capacity for February in south Germany (details in this edition). Unfortunately, these are all not prerequisites for wishing you a relaxed start to the new year. I assume the situation will not have improved by the time you hold this edition in your virtual hands.

There is also a bit of good news in this edition. In the chapter on personnel, the retirement of three people is announced. I have known these people for a relatively long time and have great respect for their professional achievements for various reasons. They have all fully experienced the liberalisation of the energy market over the past 20 years and have thus contributed to – and sometimes suffered from – an infinitely exciting development of the energy industry.

On a personal note: This publication has been around for almost 20 years. During that time, I have written every single word myself. It is time to say “I” when expressing my own perspective or the perspective of this publication.

In spite of everything, I wish you a good start to the new year!

Dr. Heiko Lohmann
Freelancer

E-Mail +49 30 8824005

TOPIC OF THE MONTH 2021 Review and 2022 Outlook

The review of the year and the outlook for the new year is a tradition in the first issue of ener|gate Gasmarkt every year – a tradition that will remain in place.

I do not know whether anyone will, in a few years, proudly say: “I was part of it”. The whole market situation is increasingly becoming a nightmare for everyone. The development of gas trading prices and price volatility in 2021 is unprecedented. The graph of the year is shown in Figure 1. It shows the soaring prices and the considerable backwardation along the curve (Cal 23), but not the often strange intra-day volatility.

However, "review" is not quite the right word for looking at the market madness – we are still in the middle of it, as the days since mid-December have made clear. For the 2022 outlook, a very clear crystal ball would allow me to predict whether and when the current mayhem will end. Today, the best guess seems to be that it will presumably last much longer than this winter. One reason is the uncertainty regarding future Russian gas supplies and Gazprom’s utilisation of its west European storage capacity. This is, of course, related to the still pending Nord Stream 2 certification, but also depends on the future political relations with Russia and the relations to Russia as a gas supplier. Hopefully, 2022 will not end with the following conclusion: It was as painful as 2021. The current tensions with Russia due the concentration of troops at its western border are frightening. At the beginning of December, I moderated a web talk organised by E-World about the 2021 price turbulences…