Montel Magazine 1 - 2020 - Page 54

Helle Ostergaard Kristiansen CEO, Danske Commodities In 2019, we experienced European gas markets becoming increasingly affected by the global supply/demand situation. The influx of LNG to Europe and oversupply of gas in general have pushed down natural gas prices, resulting in increased profitability of (cleaner) gas-fired power plants at the expense of coal plants. The renewable market parity trend has started, but we are still waiting for the boom – 2020 may be the year. We see a decrease in PPA [duration] requirements by financers and willingness to take more risk in renewable project investments. However, with subsidies being phased out, the demand for fixed-price PPAs will increase. HPM Thomas Bjorn Houlind director, markets at Energi Danmark The most important event in 2019 was the heavily oversupplied gas market and firm carbon market causing a shake-up in the European production stack with spark cost moving below dark cost. This caused country spreads to narrow and power flows to change significantly compared to earlier years. Andreas Schierenbeck CEO of Uniper We are convinced that the next decade will be a decisive one – for Uniper, for Germany and for the whole world. The next few years will set the course for the transition to a greener economy and a cleaner environment. At midnight on December 31, 2019, not only did a new decade begin: Rather, the confirmation of a whole new era started – it will be a question of accelerating the transition from classic energy sources to green technologies in a realistic manner. The answer is not to turn the lights off. LW 2020 is starting out bearish with hydro reservoir levels significantly above normal in most European countries and an even more oversupplied gas market than 2019 due to the absence of winter, high LNGinflows and strong flows from Russia. Quite a few new interconnectors, and an increase in capacity on existing ones, are coming in in 2020. Looking at most countries’ reactions to the 70% rule on available capacity, and the level of countertrading and curtailments in 2019, it will be interesting to see how this increase in installed capacity will affect actual flows and short-term markets. Cagdas Ates CEO, MFT Energy The power markets had a year of converging prices and Germany surprisingly became an importer of electricity in untraditional seasons. We also witnessed a day with full market decoupling fall back this year in power spot markets – a very rare incident that provoked extraordinary spot prices. One major trend in the industry over the last three years has been the establishment of new start-up companies that focus on energy trading with a slim cost base and niche focus areas. We at MFT Energy welcome and support this development and help ambitious people with great ideas to realise their dreams. We think that these start-ups challenge the traditionally large energy companies and help the industry become more efficient and transparent. With the effect of global warming, Europe has not really had cold days yet this winter. This might increase the oversupply of the gas into 2020 and it can also have an effect on power prices. We will follow the discussions between Acer and European TSOs regarding the utilisation of the cross-border capacities in 2020. There is a new market coupling in European markets scheduled in Q4.Lastly the political developments regarding Brexit, the tensions in the Middle East, a new election in US and ongoing trade-wars – these are all going to be the topics that we will watch closely. HPM 54 Montel Magazine 1–2020