Iran crisis threatens rising electricity prices in Europe and problems for industry - Reuters
Kyiv • UNN
The ongoing crisis in Iran, which has halted energy supplies and LNG production in Qatar, threatens rising electricity prices in Europe. This will weaken the competitiveness of industry, says the CEO of Statkraft.
The protracted crisis in Iran, which has led to the cessation of key energy supplies and the halt of liquefied natural gas (LNG) production in Qatar, is likely to push up electricity prices in Europe and weaken industrial competitiveness, the CEO of Norwegian energy company Statkraft said on Thursday. This is reported by Reuters, writes UNN.
Details
US and Israeli attacks on Iran and Tehran's strikes on Arab Gulf states have paralyzed shipping through the Strait of Hormuz.
The crisis has forced a halt to liquefied natural gas (LNG) production in Qatar, which accounts for 20% of the world's supply of this super-cooled fuel.
While it is primarily a humanitarian crisis and a geopolitical situation, the conflict has broader implications, said Birgitte Ringstad Vartdal, CEO of Statkraft, during the presentation of the fourth-quarter financial results.
"What is happening now could lead to a period of higher prices in Europe," Vartdal said, emphasizing that gas-fired power plants often determine the price of electricity.
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Statkraft is the largest producer of renewable energy in Europe and owns four gas-fired power plants in Germany.
The German, French, and British energy markets are particularly vulnerable to the risk of a sharp 50% increase in gas prices since the start of the conflict on February 28, she added.
The European benchmark electricity price in the German market has risen by approximately 9% during this period.
A sustained period of higher prices will be a challenge for industrial activity, Vartdal warned.
We are also in a period where gas storage levels in Europe are low, but at the same time, we have fortunately passed the worst part of winter, so we are not concerned about the physical situation in the coming months.
Vartdal also noted that the combination of a weak hydrological situation in southwestern Norway due to a lack of snow that could later fill hydropower plants, and any long-term impact on the gas market, could also affect prices in Norway.
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