Germany Braces For Swings In Energy Demand And Prices

Europe’s biggest economy, Germany, is bracing for another summer of swings in energy demand and prices as the national weather service issues its first heat warning for the season for this week.

Germany’s weather forecaster Deutscher Wetterdienst on Sunday issued the first heat warning for the year – “heat stress” – as temperatures are expected to exceed 32 degrees Celsius (89.6 F) in the early afternoon this week and nighttime temperatures will only see limited cooling.

Humidity has also risen in many parts of Germany after rains and storms overnight during the weekend.  

Overall, the first heatwave of the season means that Germany and the rest of Europe could see another summer of hot weather and fluctuating energy demand as power demand for cooling will rise. Heatwaves could also reduce hydropower generation or wind generation if the heat suppresses winds, boosting demand for other energy sources and leading to energy price swings this summer.

Last year, heatwaves sent European natural gas prices higher, while supply of coal and petroleum on the Rhine River—a key waterway for barge transportation – was disrupted, due to low river levels.

In Germany, the energy crisis is not over yet, Klaus Müller, the president of Germany's energy regulator, told the Funke media outlet earlier this month.

Despite the fact that the levels of natural gas in storage are more comfortable than in the previous two years, the crisis is far from over, and weather will be the biggest factor, Müller, president of Germany’s Federal Network Agency, Bundesnetzagentur, said. 

As of June 17, storage tanks in Germany were 78.44% full, while in the EU the overall level was nearly 74%, according to data from Gas Infrastructure Europe.

“If everything goes well, we will have full storage facilities in the late summer,” Müller said, referring to Germany’s storage levels.

By Tsvetana Paraskova for Oilprice.com

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