It’s been a pretty quiet week in the energy markets with both European and UK gas markets easing week on week. Muted geopolitical risk and soft macro signals, have seen commodity markets driven by short-term supply-demand dynamics. The focus has been on Norwegian flows, with the maintenance at Troll being extended a number of times. Gas storage levels remain healthy, with the EU averages around 66% full and should hit the autumn injection deadline according to many analysts. With the market well-supplied, pockets of disruption and weather unpredictability can still inject price volatility, keeping traders alert but not panicked.
In other news this week UK’s Centrica says it plans to switch its offshore Rough gas field back to producing gas this winter, ending its use as a seasonal storage facility, as it continues to seek financial support for the loss-making storage activities. Centrica hopes that government support could provide backing for continued gas storage operations and eventual use as a hydrogen storage facility. A seasonal storage facility like Rough primarily makes its income by the difference between summer and winter gas prices. Those spreads have been much narrower in recent years, or even negative at times, when the summer price moved above the winter. That has reduced the income for operators.
Elsewhere the UK will also increase the guaranteed price offered for offshore wind projects in this year’s renewables auction by 11%, according to government documents, amid rising costs for projects due to inflation and supply chain bottlenecks. The Labour government is facing mounting pressure from opposition parties over the affordability of its net-zero plan and following a 66% rise in the prices offered for offshore wind during last year’s auction. The country has put offshore wind at the heart of its plans to decarbonise its electricity sector by 2030. It aims to boost capacity to 43-50 gigawatts (GW) by the end of the decade, from around 15 GW currently. In UK’s annual renewables auctions project, developers bid for contracts-for-difference (CfD), which offer them a guaranteed price for their electricity. Offshore wind projects will be offered a strike price of £81/MWh in 2012 prices, up from the £73/MWh offered in last year’s auction. Floating wind projects, the technology for which is at an earlier stage of development, will be offered at £194/MWh, up from £176 previously. A spokesperson for DESNZ said the announced strike prices are indicative and the auction could clear at lower levels. Application rounds for the auction, called AR7, will begin in August with the results announced between December and the end of February 2026.
Flagship Energy’s Tejal Shah Energy Markets Update – 25th July 2025 appeared first on Energy Live News.