AleaSoft Energy Forecasting, May 13, 2024. In the second week of May, prices in the main European electricity markets remained at similar levels to those of previous weeks, although the weekly average rose in most of them. The weekly average price fell only in the French market, which registered the lowest value, thus breaking the Iberian market’s streak of the lowest prices. Photovoltaic energy reached all‑time records in Germany, Spain, France and Portugal. Wind energy production fell and gas and CO2 prices rose.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of May 6, solar energy production increased in most European markets compared to the previous week. The French market registered the largest increase, 49%, reversing the downward trend of the previous two weeks. The Portuguese and Spanish markets registered increases of 35% and 16%, respectively. The German market had the smallest increase, 9.4%, maintaining an upward trend for the third consecutive week. The Italian market was the exception, with a drop in solar energy production of 2.1%.
During the second week of May, the Portuguese, Spanish, French and German markets broke historical records for daily solar photovoltaic energy production. The Portuguese market broke the production record on Sunday, May 12, with a total generation of nearly 20 GWh. Mainland Spain set the all‑time record on Wednesday, May 8, with 181 GWh generated using photovoltaic energy. On the other hand, France set the record on Friday, May 10, with 128 GWh, while Germany set it on Sunday, May 12, with 382 GWh of generation using this technology. The Italian market registered the second highest value in its history, 132 GWh, after the maximum registered on Sunday, May 5, which was 134 GWh.
For the third week of May, according to AleaSoft Energy Forecasting’s solar energy production forecasts, it will continue to increase in Germany. However, in Spain and Italy, solar energy production will decrease.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
In the second week of May, wind energy production decreased in all analyzed European markets compared to the previous week. The German market experienced the largest decrease, 64%, followed by the Portuguese, Spanish and Italian markets, with decreases of 50%, 34% and 27%, respectively. The French market continued to register declines for the third consecutive week, this time by 9.0%.
In the week of May 13, according to AleaSoft Energy Forecasting’s wind energy production forecasts, it will increase in the German, Spanish and Portuguese markets. On the other hand, in the French and Italian markets, wind energy production will continue to decline.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Electricity demand
During the week of May 6, electricity demand declined in most major European electricity markets compared to the previous week. The French market registered the largest decline, which was 8.9%, followed by declines in the Netherlands and Great Britain, 7.6% in both markets. These three markets continued the downward trend for the second consecutive week. On the other hand, the Portuguese and Belgian markets had declines of 2.0% in both cases. In the Belgian market, it is the third consecutive week with this trend. Most of the declines in demand are related to the celebration of the Ascension Day on May 9 in Germany, Belgium, France and the Netherlands. The United Kingdom celebrated the Early May bank holiday on Monday, May 6.
On the other hand, the markets of Italy, Spain and Germany registered increases in demand of 6.8%, 1.7% and 0.1%, respectively. The increases in demand in the markets of Italy, Spain and Germany during the second week of May were mainly related to the recovery in demand after the May 1 holiday, International Workers’ Day.
On the other hand, the less cold average temperatures registered in a large part of the markets favored the decrease in demand. In Italy, France, Spain, Great Britain and Portugal average temperatures increased between 1.6 °C and 3.8 °C. In Belgium the increase was smaller, 0.9 °C. The Netherlands and Germany were the exception, where average temperatures decreased by 0.3 °C and 2.1 °C, respectively.
For the week of May 13, according to AleaSoft Energy Forecasting’s demand forecasts, it will increase in the markets of Germany, Belgium, France, Portugal and Italy. On the other hand, in the markets of the Netherlands, Spain and Great Britain demand will decrease.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica, TERNA, National Grid and ELIA.
European electricity markets
In the second week of May, prices in the main European electricity markets increased compared to the previous week. Most markets reached the highest prices of the week on Monday, May 6, and then fell back over the course of the week, leaving most days at prices similar to those of previous weeks. The exception to the weekly price rises was the EPEX SPOT market of France, with a 17% drop. The Nord Pool market of the Nordic countries and the EPEX SPOT market of Germany achieved the largest percentage price increases, 12% and 18%, respectively. In contrast, the N2EX market of the United Kingdom registered the smallest percentage increase, 1.4%. In the other markets analyzed at AleaSoft Energy Forecasting, prices rose between 2.1% in the EPEX SPOT market of the Netherlands and 11% in the MIBEL market of Portugal.
In the second week of May, despite the price increases, weekly averages remained below €65/MWh in most analyzed European electricity markets. The exceptions were the German market, the British market and the IPEX market of Italy, with averages of €67.33/MWh, €81.65/MWh and €90.86/MWh, respectively. On the other hand, the French market registered the lowest weekly average, €28.06/MWh, thus breaking the streak that the MIBEL market had been on by reaching the lowest prices for thirteen consecutive weeks. In the rest of the analyzed markets, prices ranged from €30.81/MWh in the Spanish market to €62.81/MWh in the Dutch market.
Regarding hourly prices, most analyzed European markets registered negative prices on May 11 and 12. The exceptions were the British and Italian markets, where there were no negative prices, and the Portuguese market, which only registered negative prices on the 11th. On the other hand, the Nordic market also reached negative prices on Thursday, May 9. The rest of the analyzed markets, in addition to these three days, registered negative hourly prices on Monday, May 13. The Dutch market reached the lowest hourly price again, ‑€200.00/MWh, on Sunday, May 12, from 13:00 to 14:00.
During the week of May 6, the fall in wind energy production and the increase in the average price of gas and CO2 emission allowances had an upward influence on European electricity market prices. In addition, electricity demand increased in the German, Spanish and Italian markets. The previous week’s public holiday on May 1 led to a decrease in demand and prices on that day in almost all markets. The Italian market also registered a decrease in solar energy production.
AleaSoft Energy Forecasting’s price forecasts indicate that prices of the analyzed European electricity markets might fall in the third week of May, influenced by the increase in wind energy production in most markets.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
After the price drop in the first week of May, the settlement prices of Brent oil futures for the Front‑Month in the ICE market remained below $85/bbl during the second week of May. On Thursday, May 9, these futures reached their weekly maximum settlement price, $83.88/bbl. This price was 0.3% higher than the previous Thursday. On the other hand, on Friday, May 10, these futures registered their weekly minimum settlement price, $82.79/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 0.2% lower than the previous Friday and the lowest since March 13.
In the second week of May, concerns about global economic evolution counterbalanced the upward influence caused by instability in the Middle East and the possibility that OPEC+ will maintain its production cuts in the second half of 2024. As a result, Brent oil futures prices remained stable.
As for TTF gas futures in the ICE market for the Front‑Month, on Monday, May 6, they reached their weekly maximum settlement price, €32.14/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 15% higher than the previous Monday and the highest since April 19. Subsequently, settlement prices declined, but they remained above €30/MWh. On Friday, May 10, these futures reached their weekly minimum settlement price, €30.03/MWh. This price was 1.6% lower than the previous Friday.
In the second week of May, concerns about supply to refill reserves for the coming winter drove TTF gas futures prices higher. LNG supply decreased in April due to higher prices in Asian markets. In addition, next winter might be colder than normal. However, still high European reserve levels continued to limit price increases.
As for CO2 emission allowances futures in the EEX market for the reference contract of December 2024, settlement prices remained above €70/t during the second week of May. On Tuesday, May 7, these futures reached their weekly minimum settlement price, €70.98/t. According to data analyzed at AleaSoft Energy Forecasting, this price was still 3.6% higher than the previous Tuesday. In contrast, on Thursday, May 9, these futures registered their weekly maximum settlement price, €73.26/t. This price was 1.0% higher than the previous Thursday and the highest since April 17. In the last session of the second week of May, the settlement price was €71.90/t.
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 and the energy transition
On Thursday, May 9, AleaSoft Energy Forecasting and AleaGreen held the 44th webinar of their monthly webinar series. This webinar addressed the evolution and prospects of European energy markets, as well as the low, zero and negative prices in the European electricity markets and their impact on the viability of renewable energy projects in the long term. It also analyzed the vision of the future of the energy sector and the vectors of the energy transition, such as renewable energy, demand, energy storage, green hydrogen, transmission and distribution grids and international interconnections. On this occasion, Luis Atienza Serna, Minister of the Spanish Government between 1994 and 1996 and president of Red Eléctrica between 2004 and 2012, participated, for the second time, in the analysis table of the webinar in Spanish.
AleaSoft Energy Forecasting and AleaGreen will hold the next webinar in their series on Thursday, June 13. The webinar will analyze the evolution of European energy markets and the prospects in the second half of 2024, the growth opportunities in the renewable sector, regulatory and design challenges of the wholesale market, and the current state of the PPA market in Spain. In this webinar, guest speakers from Engie Spain will participate for the sixth time.
Source: AleaSoft Energy Forecasting.