Strong wind power generation with storms sweeping through northwest Europe this week are set to ease the power prices in major markets, while natural gas prices continue to tumble amid signs that the Russia-Ukraine standoff might not lead to an armed conflict.
Although storms could down power lines, the strong winds are expected to drive wind power generation to records this week, Bloomberg models show.
Low wind speeds and low power generation from wind farms were some of the reasons why Europe's power prices shot up in the autumn and early winter of 2021, alongside low natural gas storage levels and subdued pipeline gas deliveries from Russia.
Now storms are nearing northwest Europe, with wind gusts set to push wind power generation in the biggest renewable electricity markets, the UK and Germany, to records.
Storms Dudley and Eunice, two deep low-pressure systems, will bring very strong winds and potentially snow to the UK this week, the UK's Met Office warned on Tuesday. Both storms are likely to cause some disruption, and National Severe Weather Warnings have been issued. Storm Dudley will impact the northern half of the UK from Wednesday afternoon through to early Thursday, while Storm Eunice will bring strong winds and potentially some snow for parts of the country on Friday, the Met Office said.
The weather forecaster of Germany, DWD, also issued official warnings, expecting "hurricane like" wind speeds. France is also on alert for strong wind speeds.
The expected strong wind power generation is set to ease the power crunch in Europe, where wholesale power prices plunged on Wednesday on expectations of record wind power generation later in the week.
Europe's benchmark natural gas prices continued to fall early on Wednesday, following the slump from Tuesday, on the back of signals that the Russia-Ukraine crisis may have started to de-escalate.
By Charles Kennedy for Oilprice.com
More Top Reads From Oilprice.com:
Charles is a writer for Oilprice.com More