According to analysts, Europe’s mild climate plays a role in the decline, as does strengthening wind, which gives wind power a larger share of power generation. Even Europe still has well-filled gas reserves. Last week, European energy ministers announced that there will also be a price cap on natural gas, which could come into effect from mid-February.
In August, natural gas on the wholesale market still cost 345 euros per megawatt hour, an all-time record. Now the price of gas fluctuates around 77 euros per megawatt hour, the lowest level since the Russians invaded Ukraine in late February.
But in the long run, natural gas remains much more expensive than before. Until autumn 2021, the wholesale price fluctuated around 20 euros per megawatt hour.
German Economy Minister Robert Habeck warned on Wednesday that gas prices would remain high for at least another year. He hopes that prices can fall by the end of 2023 if sufficient alternatives are found for the Russian natural gas that supplied more than half of the pre-war German market. However, Habeck doesn’t expect the gas price to fall below its 2021 level.
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