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Average gas supply sourcing costs declined in 2020 in most EU Member States and the Energy Community Contracting Parties by more than 4 Euros/MWh year on year, according to today’s preliminary assessment by the EU Agency for the Cooperation for Energy Regulators (ACER) and the Energy Community.
The main drivers of the price decline were the demand reduction caused by COVID-19 and the highest-ever liquefied natural gas (LNG) deliveries registered during the first half of 2020. These resulted in historically low EU hub spot prices in the second quarter of 2020. The decline in the prices of other energy commodities and the above average underground storage stocks at the beginning of the injection season were other contributing factors. Even though hub prices partly recovered from the third quarter, average yearly supply sourcing costs reached their record low since ACER started to assess them in 2012.
Convergence in sourcing prices remained overall robust amongst a majority of Member States, with the largest differences rounding about 3 Euros/MWh. This demonstrates the benefits of the Internal Gas Market. For example, in 2013 sourcing cost spreads of more than 5 Euros/MWh were frequent, implying extra yearly expenditure from 40 to 60 Euros for the average final household consumers in higher costing gas markets.
Increased convergence in gas sourcing cost is estimated to have yielded average annual welfare gains in the range of 3 billion Euros for EU gas consumers since 2013.
A detailed assessment of gas wholesale markets in the form of the Gas Volume of the Market Monitoring Report, including for the first time the gas sector’s contribution to the decarbonisation agenda, will be published in July 2021.
For more information on the preliminary assessment.
