Day: September 1, 2022

European Union member states are seeking a solution to rapidly surging energy prices through the option of altering the functioning of electricity markets.

While the energy crisis triggered by the Russia-Ukraine war laid bare the deficiencies in Europe’s energy strategy, it has all but destroyed the electricity market system, where free market conditions were supposed to provide the most affordable price.

Prices of energy products such as natural gas and electricity in EU countries have hit historic peaks since the start of the war in late February.

The price of future contracts per megawatt-hour in Europe, trading on the Dutch-based virtual natural gas trading point (TTF), rose to €340 ($341), up from €28 a year ago and €90 six months ago.

Natural gas prices on European markets thus quadrupled in six months and rose twelve-fold over the course of a year.

The rise stemmed from dropping natural gas flows from Russia to Europe along with concerns that flow levels would not return to their previous levels.

With less natural gas supplies from Russia and the boom in energy demand, prices on the spot electricity market also soared.

Electricity prices in Europe last week hit all-time highs.

In Germany, electricity prices exceeded €700 per megawatt-hour for the first time in August, up eightfold compared to a year ago.

Market intervention

Even Germany, which previously opposed intervention in the market, blames the market for peak electricity prices. Countries such as France, Spain, Belgium, and Greece also agree with Germany.

Bowing to the demands of prominent EU countries, EU Commission President Ursula von der Leyen announced that they would take steps towards better functioning of the electricity market.

“Skyrocketing electricity prices are now exposing the limitations of our current electricity market design,” von der Leyen said on Monday.

Admitting that the bloc’s electricity pricing system, which bases the final price on the latest and most expensive energy source and does not reflect the lower costs of renewables or nuclear power, was developed for different circumstances, Leyen said:

“That is why we are now working on an emergency intervention and a structural reform of the electricity market.”

At this point, resource prices in electricity generation are expected to be decoupled by the EU’s intervention in the electricity market.

It is envisaged that the pricing of renewable energy sources – such as wind and solar – and fossil fuels – such as natural gas or coal – will be differentiated within the market.

Thus, payments for renewable resources are projected to move lower and electricity prices to fall.

However, it has also been suggested that there may be problems in gas supply in the face of this intervention. It seems difficult to persuade manufacturers to sell below free market prices.

Source: Anadolu Agency

The world’s largest installed windfarm, Hornsea 2, is now fully operational, Danish firm Orsted announced late Wednesday.

The 1.3-gigawatt (GW) offshore wind farm located 89 kilometers off the Yorkshire coast comprises 165 wind turbines, which will power over 1.4 million UK homes with low-cost, clean and secure renewable energy.

The wind farm is situated alongside its sibling Hornsea 1, which together can power 2.5 million homes and make a significant contribution to the UK government’s ambition of having 50 GW of offshore wind in operation by 2030.

“The Hornsea zone, an area of the North Sea covering more than 2,000 km2, is also set to include Hornsea 3. The 2.8 GW project is planned to follow Hornsea 2 having been awarded a contract for difference from the UK government earlier this year,” the statement read.

Commenting on the latest development, Duncan Clark, head of Region UK at Orsted said that Hornsea 2 represents a tremendous milestone for the offshore wind industry.

“Current global events highlight more than ever the importance of landmark renewable energy projects like Hornsea 2, helping the UK increase the security and resilience of its energy supply and drive down costs for consumers by reducing dependence on expensive fossil fuels,” he said.

Source: Anadolu Agency

Anadolu Agency is here with a rundown of the latest developments around the world.

Afghanistan marked the first anniversary of the US troop withdrawal from the country after a 20-year conflict between foreign forces and the Taliban.

Azerbaijani and Armenian leaders agreed to accelerate work on a peace treaty, European Council President Charles Michel announced following their negotiations in Brussels.

The US declined to respond directly to Turkish statements that Greece has increasingly harassed Turkish jets flying over international airspace but did urge the two neighbors to “resolve (their) differences diplomatically.”

Türkiye is planning to submit to NATO and its allies the radar logs showing how a Greek S-300 air defense system harassed Turkish F-16 jets during a mission in international airspace, sources said.

The US struck a guarded note of optimism that it can reach an agreement with Iran on a mutual return to the landmark 2015 nuclear agreement.

At least 22 million people living in Pakistan, or 10% of the population, have been potentially exposed to flooding, according to a map published by a UN agency.

A mission from the UN’s nuclear watchdog arrived in Ukraine’s southern city of Zaporizhzhia to inspect Europe’s largest nuclear power plant.

G-7 finance ministers on Friday are set to discuss putting a price cap on Russian oil, according to US National Security Council spokesman John Kirby.

Moody’s raised the Turkish economy’s growth forecast for 2022 from 3.5% to 4.5%, according to the credit rating agency’s Global Macro Outlook 2022-23 Report August update.

Source: Anadolu Agency

Serena Williams on Thursday beat Estonia’s Anett Kontaveit 2-1 to advance to the third round of the US Open.

Williams, a six-time US Open champion, defeated world number two Kontaveit with sets of 7-6, 2-6, and 6-2 in the second round that lasted two hours and 27 minutes at Arthur Ashe stadium.

The 40-year-old player will face Ajla Tomljanovic from Australia in the next round.

Meanwhile, Leylah Fernandez, the 2021 runner-up, suffered a surprise defeat in the second round of the tournament, being beaten 2-0 by Liudmila Samsonov of Russia.

In the men’s singles, reigning champion Daniil Medvedev advanced to the next round after defeating Arthur Rinderknech from France with 6-2, 7-5, and 6-3 results.

Medvedev will take on Chinese player Yibing Wu in the third round.

Casper Ruud, Jack Draper, Pablo Carreno-Busta, Matteo Berrettini, Alex De Minaur, and Nick Kyrgios have moved to the next round after beating their opponents.

Source: Anadolu Agency

Liz Truss and Rishi Sunak, the remaining contenders in the race to become the next leader of the Conservative Party and prime minister of the UK, faced off against each other Wednesday in the final debate before the winner is announced next week.

The debate was held at Wembley Arena in north-west London and witnessed Sunak and Truss tussle over issues surrounding taxes, energy and the cost of living.

Truss, the foreign secretary and frontrunner of the leadership contest, ruled out offering energy rationing to support struggling families in the coming winter despite a worsening cost of living crisis that has seen inflation skyrocket and wages plummet.

Asked by moderator and radio show host Nick Ferrari whether she would rule out energy rationing, Truss responded by saying: “I do rule that out. Yes.”

On the issue of introducing new windfall tax impositions, Truss said “yes, no new taxes” when asked if she would implement new tax policies as incumbent Boris Johnson did in 2019.

Rishi Sunak, the former chancellor of the exchequer and self-described underdog of the race, took a more cautious approach when it came to addressing the crisis, warning that “we shouldn’t rule anything out.”

“The challenges we face with this crisis are significant. Many European countries are looking at how we can all optimize our energy usage. That is a sensible thing for us to be doing as a country,” Sunak said.

Sunak’s approach is reminiscent of the one taken by the French government after it warned that energy rationing may need to be implemented following Russia’s cutting off of gas supplies in reaction to international sanctions over its war against Ukraine.

Under the UK government’s “worst-case scenario,” businesses and households could face electricity blackouts in the coming winter over growing uncertainty surrounding power supplies.

On Sept. 5, the Conservative Party membership will select a new leader of the party as well as the new prime minister of the UK.

Source: Anadolu Agency