AT A GLANCE
- Solar energy is becoming more competitive as prices have fallen 80% over the past decade
- Natural gas prices in Europe and Asia remain high ahead of the winter heating season
While European and Asian natural gas prices have fallen significantly from their recent peak, they remain at exceptionally high levels.
As of mid-September, Japan-Korea Marker, a benchmark for natural gas prices in Asia, was five times the price of Henry Hub, the primary north American benchmark. In Europe, prices are even higher; the Title Transfer Facility price in the Netherlands was eight times the Henry Hub price.
High Eurasian natural gas prices are having both short-term and long-term effects. The short-term impacts include:
- Higher electrical costs for households this winter
- Larger budget deficits for governments that subsidize those costs
- Supply chain disruptions for producers of energy-intensive goods, including aluminium, copper, fertilizer and automobiles
- Less supply and higher prices for greenhouse-grown crops. such as cucumbers, lettuce and tomatoes
Long term, higher prices could spur investments that would move Europe, Japan and Korea toward energy independence. To that end, solar energy is becoming more and more competitive, with prices having fallen by 80% over the past decade. The problem with intermittent energy sources, such as solar and wind, has always been the cost of storage. There’s good news then that the price of lithium battery storage has fallen by 98% over the past 30 years.
If the trend toward lower costs for alternative energies and energy storage continues, it is possible to envision a very different energy future – one of abundant, inexpensive and secure supplies across Europe and Asia.
Originally Posted September 26, 2022 – The Search for Alternative Energy
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