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Energy Market Insights: The relief of February shattered by War

23 March 2022

Average power decreased in February down 17% on January, coming in at €175/mWh, 286% up on the same period in 2021. While February gave some relief, the energy crisis continues and has escalated due to the war in Ukraine.

How Gas impacted the Energy Markets in February

  • Gas prices remained relatively stable gas and even decreased during February as the market had priced in Gazprom’s erratic deliveries of gas westwards.
  • Liquified Natural Gas (LNG) continued it’s record breaking delivery schedule in February
  • Mild weather and large renewable generation lowered demand for gas and assisted the European storage situation.
  • All the positivity changed following the Russian invasion on 24 February. Gas spiked 34% on 24 Feb rising further in early March.


February was a bumper month for Wind generation.

  • Wind contributed over 57% of the generation mix, up 63% on January.
  • Renewable generation has improved in recent months, but 2021 will be remembered as a disappointing renewable year.

Generation Capacity is significantly improved versus 2021.

  • Outages are well improved from the mid 2021 highs. Outages averaged 632MW during the month.

What’s the forecast for the next 12 months?

  • Forward prices were lowering following Decembers high and improving gas storage situation in Europe. of power remains elevated due to bullish gas prices.
  • The breakout of war, European sanctions and markets fear of further sanctions against Russian energy exports has increased the risk premium in forward pricing.
  • That premium will remain while the uncertainty of the Ukrainian situation remains.

Key market drivers for next 12 months

  • Geopolitical situation in Ukraine – Negative
  • Weather – Mild winter so far alleviating pressure on European storage – Positive
  • Pent up demand for Gas Summer refilling season and expected EU mandated minimum storage levels – will support prices – Negative
  • LNG deliveries will remain strong – US key source – Positive



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