In this period of energy price shock, the fact that the gas spot price was temporarily negative a few days ago is surreal. Filled storage capacities, mild weather and an influx of boats filled with liquefied natural gas (LNG) were enough to make people no longer know what to do with a quantity of gas directly available on the market, to the point that its price became negative. A height! This will not remain without consequence: LNG ships have been diverted to countries where prices are more attractive, so that if the temperature drops in Europe and we suddenly consume more gas, prices are likely to skyrocket. .. for fear of a shortage. Moreover, the prices for delivery in the…
In this period of energy price shock, the fact that the gas spot price was temporarily negative a few days ago is surreal. Filled storage capacities, mild weather and an influx of boats filled with liquefied natural gas (LNG) were enough to make people no longer know what to do with a quantity of gas directly available on the market, to the point that its price became negative. A height! This will not remain without consequence: LNG ships have been diverted to countries where prices are more attractive, so that if the temperature drops in Europe and we suddenly consume more gas, prices are likely to skyrocket. .. for fear of a shortage. Moreover, the prices for delivery in the coming months remain relatively high. In short, in this energy crisis, we must expect everything. Basically, we are not prepared for such a situation. Clearly insufficient storage capacities, an electricity market linked to a resource that has suddenly become scarce, supply contracts with infinitely complex price estimation formulas… In a period of relative price stability, all these elements don’t make a big difference. But in the current circumstances, who can still say whether the price he is paying now for his energy is a fair reflection of what he will have to pay tomorrow or over the whole of a year? Think, for example, of gas and electricity delivery contracts for which the down payment was estimated on the basis of prices at the end of August/beginning of September. In view of current prices, these estimates no longer mean anything. But if the winter is harsh, the exceptional prices of August could very quickly become a reality again. In short, you would almost have to be trained as a commodity trader to manage your energy bills. That said, a trader also uses hedging instruments to develop his investment strategy. However, the final consumer of gas and electricity does not have much. The main hedging tool was to take a fixed price contract for a fixed period. But this is hardly possible at the present time… Ideally, in a market where the price has become very volatile, having a production and storage capacity is obviously the best possible hedge: this makes it possible to avoid not to buy energy when the tariffs are high but to get down to it when the price is the most interesting on the spot market. Moreover, these behaviors would have the effect of smoothing the price… for everyone. This is in fact the idea that is already in force in Flanders for electricity, via a digital meter and the encouragement to install a battery. In the other Regions, the process is slower, and that’s a shame. Of course, it is a question of means. But households who have the possibility of making these investments (you must have the financial means and have sufficient space) should at least be strongly encouraged to do so, because this would reduce the pressure on the network and therefore the average price paid. by the whole population. For gas, the problem is more complex. First of all, there is no production capacity, of course. However, storage solutions exist for individuals. But a problem arises: what is the point of investing in a fossil energy that we are trying to get rid of? This problem also arises at the level of companies and countries, which limits investment capacities and… the possibility of freeing ourselves from high and volatile prices. This is the paradox of the current period…
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