CURRENT ENERGY MARKET SUMMARY JUNE 2024

In this article, we analyze the current situation of the energy market, highlighting recent trends in electricity and gas prices, as well as recommendations to optimize customer rates.

Index

• Introduction
• Analysis of the electricity market
• Gas Market Analysis
• Recommendations
• Frequently Asked Questions
• Conclusion

Introduction

During the months of March and April, the closure of fixed prices for electricity and gas was recommended due to a forecast increase in the markets. The current situation confirms this increase, but informed decisions can still be made to minimise the risk.

Analysis of the electricity market

The rise in electricity prices is due to:

• Low energy demand due to a mild winter.
• Significant increase in renewable energy.
• Increase in energy demand with the arrival of heat and the decline in wind generation.

Demand is expected to increase during the summer, leading to higher wholesale prices and, consequently, higher fixed-price offers.

Gas Market Analysis

In the case of gas:

• Prices are on the rise.
• The completion of Tour 4 of gas for communities will lead to the return of contracts to the free market.
• Europe's announcement on cutting Russian gas has sent current and future prices soaring.
  It is important to consider that the marginalist system sets the price according to the most expensive technology in the generation mix.

Recommendations

• It maintains an excellent price-commission ratio with an extra 10% bonus.
• They allow you to close prices on a quarterly basis, offering flexibility and peace of mind.
• Invoice based on the customer's actual consumption curve and a high cost of adjustment services not passed on in real time is expected.
•  

Frequently Asked Questions

Why is it important to lock in fixed prices ? Locking in fixed prices allows you to secure rates before market increases make offers less attractive.

What are the advantages of indexed prices? Some trading companies allow you to close quarterly contracts without a commitment. This allows you to benefit from possible market drops without committing to the same price for 12 months.

What are the advantages/disadvantages of an indexed price?

• A fixed price for the kWh consumed guarantees us the same price for 12 months.
• In an indexed price, we will pay the real price of energy. In a bear market, this will quickly be reflected in our bills; the same goes for a bull market.
• Most of these contracts do not have a permanence period, so in the event of an unstable medium/long-term market, they allow customers to change their rate or change their supplier.

Conclusion

In summary, the current situation of the energy market presents challenges and opportunities. It is crucial to be well informed in order to make decisions that optimize rates and minimize risks. Whether by closing fixed prices, opting for flexible indexes or selecting rates that adjust to actual consumption, there are options that can be adapted to each customer profile.

Frequently Asked Questions (FAQ)

1. Why is it important to lock in fixed prices?
   Locking in fixed prices allows you to secure rates before market increases make offers less attractive. This provides stability and predictability in bills, especially in volatile markets.
2. What are the advantages of indexed pricing?
   Indexed pricing allows you to benefit from possible market declines without committing to the same price for long periods. In addition, some traders offer quarterly contracts with no permanence, providing flexibility.
3. What are the advantages and disadvantages of an indexed price?
   1.Advantages: In a bear market, lower prices will be quickly reflected in invoices.
   2.Disadvantages: In a rising market, price increases will also be quickly reflected in bills. The lack of permanence in some contracts allows you to change tariff or supplier in case of medium/long term instability.
4. What benefits do quarterly price lock contracts offer?
   These contracts provide flexibility and peace of mind, allowing for short-term rate adjustments and avoiding lengthy commitments that can be disadvantageous in changing markets.
5. How does the most expensive technology in the generation mix affect the price of energy?
   In marginalist systems, the most expensive technology in the generation mix determines the price of energy. This can lead to significant fluctuations in costs depending on the technology used, affecting bills if indexed contracts are chosen that reflect real-time market prices.
   

Contact us!

If you have any questions or need personalized advice to choose the best option for your energy consumption, do not hesitate to contact us. Our team of experts is here to help you make the best decision and ensure you get the best possible rate. Fill out our contact form here and we will get back to you as soon as possible.
We are here to help you navigate the complex world of the energy market with confidence and peace of mind!
Thank you for reading this article. We hope that we have provided you with valuable and useful information. See you soon!