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Europe now has so much natural gas that prices just dipped below zero

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Re: Europe now has so much natural gas that prices just dipped below zero

#141

Post by leobg »

tuukkah wrote: post #139
leobg wrote: post #108

Earlier quoted context omitted.

Unfortunately not in winter though, I think.

Apparently and surprisingly, the biggest issue is not the darkness but cleaning the panels from frost and after snowfall. On the positive side, subzero temperatures increase the photovoltaic efficiency, white snow increases the amount of light hitting the panels, and the demand is highest during the cold, calm and sunny winter weather type. https://www.oulu.fi/en/blogs/science-arctic-attitude/potenti...

Very interesting. Thank you.

Re: Europe now has so much natural gas that prices just dipped below zero

#142

Post by lsaferite »

sorokod wrote: post #123
Dylan16807 wrote: post #121

Earlier quoted context omitted.

Storage is a factor in supply. The storage is having trouble, so this costs more money, which means it's going to be harder to afford heating even if the gas doesn't run out. That's why smoothing out fluctuations is relevant to people that "only care about having heating".

What do you mean by "storage is having trouble"? Are you thinking of an alternative?

They mean they don't have the capacity to offload all the waiting tankers due to the on-shore storage tanks being mostly full. The ships sitting idle costs money. In an effort to stop the bleeding from the idle tankers, they drive the costs of the fuel down in an attempt to lower the supply in the on-shore tanks so they can offload the waiting tankers.

In a normal scenario they would have enough slack in the on-shore storage to absorb the ebbs and flows of incoming tankers and outgoing usage without resorting to idle tankers in the ocean.

Re: Europe now has so much natural gas that prices just dipped below zero

#143

Post by jhoechtl »

proser wrote: post #101
antasvara wrote: post #70

Earlier quoted context omitted.

From context, it seems that the "you" in question is "a company that runs a natural gas storage space." As a company with fiduciary responsibilities, they likely can't concern themselves too much with the problem you mention.

European utilities are often public utilities that are nationalized in some way, not strictly corporate businesses.

For good. Remember Texas electricity costs soaring?

Re: Europe now has so much natural gas that prices just dipped below zero

#144

Post by tuukkah »

thaumasiotes wrote: post #137
tuukkah wrote: post #54

It's the same with electricity markets: at times there's so much wind and nuclear power that the spot price goes below zero in Europe as well as in the US: https://www.sciencedirect.com/science/article/pii/S266679242... I still pay around 5 cents/kWh to the middlemen though so consumption hasn't been profitable to me so far.

> at times there's so much wind and nuclear power Isn't the amount of nuclear power constant?

Yes and no: yes in the sense that they can't quickly power down when wind would suffice, no in the sense that they suffer both regular and unplanned shutdowns with an average load factor of 80%.

Re: Europe now has so much natural gas that prices just dipped below zero

#145

Post by xyzzyz »

kube-system wrote: post #116
bo0tzz wrote: post #65

Earlier quoted context omitted.

Producing that amount of heat with gas would still be better than using electricity.

You might think it's impossible to beat a modern 98% efficient gas furnace, but electric heat pumps can have effective efficiencies greater than 100%. (sometimes 200% or 300%!) They can do this because they "steal" heat energy from outside (yes, even in the cold winter air)

Yes, but if the electricity is made from gas, then 300% efficiency of heat pump is better than 98% efficient heat furnace only if generation efficiency is at least 33%.

Heat pumps are pretty great, but as of today, they are by no means necessarily more efficient than burning gas directly for heat, at least when it comes to GHG emissions. In fact, in very cold climates where air temperature is below freezing most of the time, air-source heat pumps are highly unlikely to be more efficient than just burning gas, unless we move wholesale to nuclear for electricity (solar won’t help you during winter, and wind is too fickle to solely depend on).

Re: Europe now has so much natural gas that prices just dipped below zero

#146

Post by ajross »

thaumasiotes wrote: post #137
tuukkah wrote: post #54

It's the same with electricity markets: at times there's so much wind and nuclear power that the spot price goes below zero in Europe as well as in the US: https://www.sciencedirect.com/science/article/pii/S266679242... I still pay around 5 cents/kWh to the middlemen though so consumption hasn't been profitable to me so far.

> at times there's so much wind and nuclear power Isn't the amount of nuclear power constant?

Yes, but demand isn't. And nuclear can't be trivially shut down, the reactor stays hot for quite a while and that energy needs to go somewhere (which is the whole point of the iconic giant cooling towers these plants have). So if demand drops rapidly and your reactors are going full tilt, the price of electricity goes to zero.

Re: Europe now has so much natural gas that prices just dipped below zero

#147

Post by ajross »

labrador wrote: post #122

What's wrong with storing it on a ship? Anchor it and pay a skeleton crew to keep it operational.

If there were empty ships that could be filled, then clearly prices wouldn't have gone negative. Surely that reservoir is filled already (or the ships are empty and enroute to gas terminals, and thus already accounted for, etc...)

Re: Europe now has so much natural gas that prices just dipped below zero

#148

Post by labrador »

kgwgk wrote: post #130
labrador wrote: post #122

What's wrong with storing it on a ship? Anchor it and pay a skeleton crew to keep it operational.

That you cannot conjure a gas tanker ship -and the required infrastructure- out of thin air.

They arrived full of gas with nowhere to offload. Those ships are what I'm suggesting wait until offloading is possible.

Re: Europe now has so much natural gas that prices just dipped below zero

#149

Post by labrador »

balderdash wrote: post #140
labrador wrote: post #122

What's wrong with storing it on a ship? Anchor it and pay a skeleton crew to keep it operational.

Nothing wrong with that, except the day $100-200k/day you’re paying for charter…

I think Germans can afford it and are willing to pay it to keep their economy going

Re: Europe now has so much natural gas that prices just dipped below zero

#150

Post by tenpies »

imnotlost wrote: post #86

The headline should be that Europe as 0 storage capacity so people will pay to get rid of the natgas (someone else should store it). This is a temporary problem and does not mean the natgas issues are solved for the winter. There was a similar issue with oil storage in April 2020[1] [1] https://www.nytimes.com/2020/04/20/business/oil-prices.html

Exactly, we are witnessing supply destruction. It's worth considering that liquid natural gas is one of the most expensive (in both emissions and cost) to ship.

It needs to be held in special LNG carrier ships that can keep it not only at the right pressure, but the right temperature (against vast fluctuations). The crew on this ship requires special training and the ships carry a different insurance profile.

This is not like oil which is essentially held at room temperature in a water tight vessel.

Therefore just having LNG in a ship takes a considerable number of resources even if it's just sitting there. Crew and insurance has to be paid, refrigeration and ship costs add up, as well as the opportunity cost.

As you can imagine, getting the LNG that you very expensively purchased in the US, shipped, and then brought to Europe, is quite important. Every day delayed this becomes money that is not just being incinerated, but also not being maid.

What we are witnessing now is supply destruction, and as much as the ignorant journalists at CNN may celebrate it, this is actually quite bad long-term for Europe.

Coincidentally, the only other thing that is likely to be more expensive to ship is what Canada's Trudeau has promised Germany it will send: hydrogen. Thankfully that is likely to never happen as the promise was as limp-wristed as it gets.

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