AleaSoft Energy Forecasting, March 20, 2023. In the third week of March, European electricity markets prices fell compared to the previous week, influenced by the decrease in gas and CO2 emission rights prices, as well as by the drop in demand and the increase of solar energy production. However, both solar and wind energy production reached record values in European markets. On the other hand, Brent oil futures reached the lowest prices since December 2021.
Solar photovoltaic and thermoelectric energy production and wind energy production
During the third week of March, the solar energy production increased compared to the previous week in all European markets analysed at AleaSoft Energy Forecasting. The largest rise was that of the German market, of 84%, while the smallest increase was that of the Italian market, of 16%. In the rest of the markets, the increases were between 38% of the French market and 55% of the Portuguese market.
On the other hand, on March 19, from 13:00 to 14:00, a record solar photovoltaic energy production of 1549 MWh was reached in the Portuguese market. In the case of the Spanish market, the photovoltaic energy production reached a record value of 13 719 MWh on March 15 in the same time period, while that day, from 17:00 to 18:00, the highest hourly solar thermoelectric energy production since September 2022 was reached, of 1860 MWh. In the French and German markets, on March 16 from 12:00 to 13:00, the highest hourly productions since August and September were reached, respectively, in the case of France of 10 271 MWh and in Germany of 31 303 MWh. In Italy, on March 18, from 12:00 to 13:00, the highest value since April 2022 was registered, of 12 110 MWh.
For the fourth week of March, the AleaSoft Energy Forecasting’s solar energy production forecasting indicates that the production might decrease in Germany, Spain and Italy.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
During the week of March 13, the wind energy production increased by 18% compared to the previous week in the German market. However, in the rest of the European markets analysed at AleaSoft Energy Forecasting there were decreases. The largest fall, of 35%, was that of the Spanish market, followed by that of the Italian market, of 31%. In the Portuguese market, the production with this technology fell by 27%, while in the French market the decrease was 10%.
Despite the decreases in the weekly production, on Wednesday, March 15, from 15:00 to 16:00, a record wind energy production was registered again in the Italian market, of 8290 MWh, a value that had been registered a few days before, on March 10 between 17:00 and 18:00. In the case of the Spanish market, on Monday, March 13, from 20:00 to 21:00, an hourly production of 20 416 MWh was reached, the second highest in history after that registered at the same time on Monday, November 21, 2022.
For the week of March 20, the AleaSoft Energy Forecasting’s wind energy production forecasting indicates that the production might decrease in the analysed European markets.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of March 13, the electricity demand fell in all European markets analysed at AleaSoft Energy Forecasting compared to the previous week. The largest fall, of 14%, was that of the Dutch market, while the smallest decrease, of 1.9%, was registered in the German and Italian markets. In the rest of the markets, the demand fell between 4.7% of the Belgian market and 11% of the French market.
In the third week of March, average temperatures increased in most European markets, contributing to the drop in electricity demand. The largest rise in average temperatures compared to the previous week, of 6.9 °C, was registered in the Netherlands, favouring the largest decrease in demand to be registered in this market.
For the week of March 20, according to the demand forecasting made by AleaSoft Energy Forecasting, the demand is expected to continue to decline in most European markets due to the rise in average temperatures.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
In the week of March 13, prices of all European electricity markets analysed at AleaSoft Energy Forecasting fell compared to the previous week. The largest drop in prices, of 30%, was that of the Nord Pool market of the Nordic countries. On the other hand, the smallest decreases, of 0.8% and 0.9%, were registered in the MIBEL market of Portugal and the IPEX market of Italy, respectively. In the rest of the markets, the decreases were between 1.4% of the MIBEL market of Spain and 24% of the EPEX SPOT market of France.
In the third week of March, the highest average price, of €133.04/MWh, was that of the Italian market, followed by that of the N2EX market of the United Kingdom, of €132.10/MWh. On the other hand, the lowest weekly average was that of the Nordic market, of €76.01/MWh. In the rest of the analysed markets, prices were between €83.80/MWh of the Spanish market and €100.16/MWh of the Belgian market.
Regarding hourly prices, on Monday, March 13, in the afternoon and on Tuesday, March 14, in the early morning, values of less than €5/MWh were registered in most European markets. In the case of the German and Dutch markets, on Monday, March 13, between 13:00 and 15:00, negative values were registered. The lowest price, of ‑€0.98/MWh, was reached from 13:00 to 14:00 in the Netherlands. This price was the lowest in this market since the beginning of the year.
During the week of March 13, the decrease in average price of gas and CO2 emission rights compared to the previous week led to a decrease in prices in all analysed markets. The drop in electricity demand and the general increase in solar energy production also had a downward influence on prices. In the case of the German market, the increase in wind energy production also contributed to this behaviour.
The AleaSoft Energy Forecasting’s price forecasting indicates that in the fourth week of March prices might continue to fall in many European electricity markets, influenced by the drop in demand. However, prices might increase in the Iberian, Belgian and Dutch markets.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
Brent oil futures for the Front‑Month in the ICE market registered price declines throughout the third week of March. As a result, on Friday, March 17, the weekly minimum settlement price, of $72.97/bbl, was reached. This price was 12% lower than that of the previous Friday and the lowest since December 2021.
The instability of the banking sector and the possibility of future rises in interest rates in the United States led to an increase in concerns about the evolution of the economy. Thus, the fear of a drop in demand exerted its downward influence on Brent oil futures prices in the third week of March.
As for settlement prices of TTF gas futures in the ICE market for the Front‑Month, during the third week of March they remained below €50/MWh. After the increase in prices of the last days of the previous week, declines were registered in almost all sessions. On Friday, March 17, the weekly minimum settlement price, of €42.86/MWh, was reached. This price was 19% lower than that of the previous Friday.
At the end of the second week of March, the strikes at French liquefied natural gas importing plants and the fear of an increase in demand for electricity generation due to the problems detected in nuclear reactors of this country contributed to increases in TTF gas futures prices. However, in the third week of March, European reserves levels and forecasts of higher temperatures allowed prices to fall again.
Regarding settlement prices of CO2 emission rights futures in the EEX market for the reference contract of December 2023, they registered decreases during almost the entire third week of March. From Monday to Thursday, prices fell by more than €10/t. As a consequence, on Thursday, March 16, the weekly minimum settlement price, of €87.07/t, was reached. This price was 12% lower than that of the same day of the previous week and the lowest since the end of January. On the other hand, on Friday, March 17, the settlement price rose slightly to €87.29/t, but it was still 13% lower than that of the previous Friday. In the third week of March, the decrease in demand associated with milder temperatures contributed to the decrease in prices of these futures.
Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.
AleaSoft Energy Forecasting’s analysis on the prospects for energy markets in Europe
The third webinar of 2023 of the series of monthly webinars of AleaSoft Energy Forecasting and AleaGreen took place on Thursday, March 16. This webinar had the participation, for the third time, of invited speakers from EY. The main analysed topics included prospects for European energy markets for the spring of 2023, the update of the regulation of the Spanish energy sector and perspectives of the European Union electricity market reform. The financing of renewable energy projects, the importance of PPA and self‑consumption, as well as the main considerations to take into account in the portfolio valuation, were also addressed. Interested people can request the recording of the webinar on the AleaSoft Energy Forecasting’s website.
On the other hand, on Thursday, April 20, the next webinar of the series will be held. In this case, in addition to the evolution and prospects of European energy markets, the vision of the future on the energy storage will be analysed. For this, there will be the participation of Raúl García Posada, director of ASEALEN, the Spanish Association of Energy Storage.
Source: AleaSoft Energy Forecasting.
