Reuters: Europe's gas faces volatile future on German green drive

Europe's gas markets face a 60 percent rise in price volatility from 2025 onwards as the region's largest economy, Germany, will need to fire more gas in its power plants to back up intermittent renewable energy capacity, an expert report said.

Germany's decision to produce more and more electricity from renewable energy sources, such as wind farms and solar panels, instead of its unpopular nuclear stations means that on days when wind speeds are low or the sky is cloudy, flexible gas-fired power plants will have to produce electricity instead.

Demand for gas in German power plants will more than double by 2030 to 38 billion cubic metres a year (bcm/y) and the spread between the highest and lowest daily prices, defined as volatility, will rise by 59 percent, consultancy Poyry said in a report looking into the impact of renewable energy on Europe's gas markets, funded by a group of large European utilities, including RWE, Vattenfall, ENI and Statoil.  MORE