Electricity and gas prices are skyrocketing globally and the tipping point for this unprecedented trend is still not in sight. This situation is putting the entire world economy under strong pressure, and could also cause financial trouble for many energy-intensive companies over the short term.
According to Antonio Delgado Rigal, chief executive of Spanish energy forecasting service AleaSoft, large-scale renewables and the PPA market immediately offer a feasible solution for big energy consumers to get out of trouble, at least in part. And green hydrogen represents the best alternative to gas over the long term, as it is increasingly taking a leading role in the global electricity market.
“With increasing energy demand and with gas replacing coal in many countries where the latter is being phased out, we are heading toward a perfect storm. And it is not clear when we can get out of it,” Delgado Rigal tells pv magazine.
This trend has been in place for while, but we were still in a “normal” context up until July, as price decreases in the short term were still considered possible, he says.
“Since then, gas and electricity prices have been growing at an unprecedented speed and nobody can say at the moment when this will be over,” he explains. “Now, gas prices are increasing exponentially. And not only in European markets, but also in the Americas and Asia, which means that this is a global matter. This is not about Russia, Algeria or Iran anymore … because we are seeing more gas consumption than gas production and, as a consequence, future gas prices are also rising.”
Delgado Rigal says that the simultaneous increase in carbon prices, especially in Europe, could become another factor pushing big energy consumers closer to serious financial issues. “I believe that a one-year moratorium may be introduced for both generators and intensive-energy consumers and this would help provide some relief under these dramatic circumstances,” he says. “This situation may lead to dramatic implications and, eventually, a global economic crisis. However, this is also showing the importance of investing more in solar, renewables and green hydrogen.”
Delgado Rigal is convinced that from a long-term perspective, green hydrogen could significantly reduce dependence on gas. Read more.
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