ANNUAL REPORT 2011 - DONG Energy

monthly average 2011 2010 ∆
Oil, Brent USD/bbl 111 80 40%
Gas, TTF EUR/MWh 23 17 31%
Gas, NBP EUR/MWh 22 17 31%
Gas/oil spread EUR/MWh (3.2) (3.5) 9%
Electricity,
Nord Pool system EUR/MWh 47 53 (11%)
Electricity, Nord
Pool, DK avg. EUR/MWh 49 52 (6%)
Electricity, EEx EUR/MWh 51 44 15%
Green dark
spread, DK 1 EUR/MWh 5 14 15%
Source: Nord Pool, EEx, Platts, Argus and BAFA.
1 Based on average prices in DK1 and DK2.
was being sustained by the indirect effects of the earthquake
in Japan, including the phasing out of nuclear
power stations in Germany, and the interruption of gas
production in Libya. The European natural gas markets
were generally well supplied in 2011, which was part of the
reason why gas hub prices remained significantly lower
than the oil-indexed gas prices. This price spread had an
adverse effect on earnings from gas trading. By contrast,
the rising oil and gas prices had a positive effect on
earnings from oil and gas production.
Electricity prices and green dark spread
The average electricity price in the two Danish price areas,
DK1 and DK2, was EUR 49/MWh in 2011, a decrease of 6%
on 2010. The hydrological balance was low at the start of
2011, and the year began with a cold, dry winter. It ended
Gas, EUR/MWh
26
24
22
20
18
16
14
12
10
Source: Argus
Gas (TTF) Gas (NBP)
2010
2011
with a high hydrological balance and a mild, wet autumn
and winter. Consequently, electricity prices were relatively
high at the start of the year, following which they dropped
to a lower level.
Due to the high hydrological balance of almost 10 TWh
above the normal level, the Nord Pool electricity price was
significantly lower than the German EEx electricity price
from September, helping drive Danish electricity prices
down. At the same time, higher electricity generation from
wind farms in the North Sea put downward pressure on
and led to higher fluctuations in the electricity price.
The green dark spread in Denmark showed a downward
trend throughout 2011, from approx. EUR 7/MWh at the
start of the year to around EUR 0/MWh in autumn, after
which it increased slightly again. The sharp decrease in the
CO price from the middle of the year had a positive effect
2
on the spread at the end of 2011. It averaged EUR 5/MWh,
EUR 9/MWh less than in 2010.
Hydrological balance, TWh
20
10
0
-10
-20
-30
-40
-50
2010 2011
Range 2003-2010
Q1
Q2
Source: SKM Market Predictor
80
70
60
50
40
30
20
10
0
-10
GlOssary
Reference is made to the glossary on
pages 127-128 188-189 for definitions of terms.
Gas (NBP)
Gas (TTF)
2010
Median 2003-2010
Electricity and green dark spread (GDS), EUR/MWh
Electricity (Nord Pool, DK)
Source: Nord Pool, Argus and ECX
Q3
2011
Q4
GDS (Nord Pool, DK)
DONG ENERGY DONG ENERGY GROUP ANNUAL REPORT 2011 – manaGEmEnt’s rEviEw 29
2010
2011
Median 2
GDS (Nord P
El (Nord Poo