The price correction was prompted by a fall in the price of gas, which accounted for 20 % of power generation in Britain and the EU, according to incomplete 2021 figures. At the beginning of January 2021, the price of gas on Europe’s key TTF hub stood at $29 per million British thermal units, while at the end of the year, it had declined to $24.40 per million BTUs.

    Trading “calmed” the sharp increase in imported liquefied petroleum gas, which occurred in the final months of last year – in the first three quarters of 2021 Europe reduced its LNG imports year-on-year by 17 % (to 94 billion cu.m. in regasified form), while in the fourth quarter, these were boosted by 36 % (to 33 billion cu.m. according to figures from Refinitiv).

    This offset to some extent the delay in the regular timetable in sending gas into underground storage areas – as of 1^st October 2020, storage areas in Europe were filled to 95 % capacity, whereas the figure for 1^st October 2021 stood at just 75 %, according to data from Gas Infrastructure Europe. Another factor was relatively mild weather – in Berlin in the first half of January, the day-time air temperature over a five-day period rose above 5 C, considerably higher than the average January norm of – 0.7 C, the German weather service reported.

    A rise in coal trading prices did nothing to contribute to lower electricity prices – forward coal prices for delivery in one month’s time on the Amsterdam-Rotterdam-Antwerp hub climbed 27 % from the beginning of the year (to $164 a tonne). Coal markets reacted sharply to Indonesia’s ban on exports introduced on 1^st January because of a critically low level of commercial stocks. Trading prices are unlikely to return to previous levels, given Indonesia’s leading role in the share of global exports of thermal coal (41 % in 2021 compared to 21 % for Australia and 18 % for Russia), according to figures from the International Energy Agency (IEA).

    This has, however, had little effect on electricity prices due to the low share of coal In power generation in Britain (2 % compared to 28 % in Germany, quoting incomplete 2021 from think tank Ember) and due to the relatively favourable conditions for wind power generation. According to data from the National Grid, the average share of wind power in electricity generation in the period from 1^st to 18^th January stood at 30 % in Britain and even exceeded 50 % on certain days – a considerable increase on last year’s average figure of 22 %.