Timera Explores 'TTF vs NBP' Battle (Update with Mar.5 Prices)

(See close of day prices March 5 in final para)

Last week's cold weather across northwest Europe sparked a surge in gas price volatility, with UK gas market being "the epicentre of system stress", said gas consultancy Timera Energy in a blog posted March 5.  

Within-day UK-NBP and Dutch TTF hub prices rose to unprecedented levels March 1, said Timera, "as Europe’s two primary hubs battled for limited gas supply [with] other hubs across Europe [also] caught in the price uplift."

Timera said that while gas market tightness does not constitute market failure, the value of flexible gas supply infrastructure is nonetheless in a cyclical trough and that the increasing demand for gas supply flexibility in companies' portfolios now points the way for a recovery in the future pricing of storage and regasification assets: "The UK gas market in particular needs investment in new deliverability flexibility after the closure of Rough storage." 

It noted also that late last week's high gas prices placed gas-fired power plants (CCGTs) at a significant cost disadvantage to coal units, and saw 11GW of coal capacity run at baseload  last week. That, plus healthy wind output, helped to cap power system tightness.

Timera Energy's full blog can be accessed on its website here.   NGW's coverage of last week's northwest Europe gas market volatility and supply tightness is accessible on our website, and in the March 5 issue of NGW Magazine. 

Update 5pm GMT, March 5 2018: Wholesale gas prices in Europe returned to more normal levels, similar to those two weeks ago, with the return of milder weather. UK NBP day ahead closed 54.65p/th ($7.54/mn Btu), while Dutch TTF closed €20.238/MWh ($7.30/mn Btu), according to a trader source, with Italian hub PSV closing at €21.275/MWh - all in contrast to higher end-of-day prices on both March 2 and ones much higher still on March 1.