Gas and CO2 reach the highest prices since the last quarter of 2023 on the last day of January

AleaSoft Energy Forecasting, February 3, 2025. In the last week of January, weekly average prices in the main European electricity markets were lower than the previous week. Lower demand and increased solar photovoltaic and wind energy production supported this evolution. However, during the week prices registered an upward trend that led most of them to reach the highest prices of the week during the weekend, in some cases on Sunday. This trend followed that registered by gas and CO2 futures, which at the end of the week reached the highest prices since the last quarter of 2023.

Solar photovoltaic and wind energy production

In the week of January 27, solar photovoltaic energy production increased in the main European markets compared to the previous week. The Italian market continued to increase for the third consecutive week, while the rest of the markets changed the trend of the previous week. On this occasion, the Portuguese market registered the largest increase, 105%, while the Italian market had the smallest increase, 14%. The markets of France, Germany and Spain registered increases of 31%, 33% and 65%, respectively.

During the week, the Iberian and French markets registered historical records of solar photovoltaic energy production. On Friday, January 31, the Iberian markets reached the highest production in history for a month of January, 17 GWh in Portugal and 119 GWh in Spain. In the case of the French market, on Sunday, February 2, it registered its highest photovoltaic energy generation for a February, 62 GWh.

For the week of February 3, AleaSoft Energy Forecasting’s solar energy production forecasts predict increases in the German, Italian and Spanish markets.

AleaSoft - Photovoltaic energy production electricity EuropeSource: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
AleaSoft - Solar photovoltaic production profile EuropeSource: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.

In the last week of January, wind energy production increased in most major European markets compared to the previous week. The Italian market registered the largest increase, 37%, following declines in the previous two weeks. The French, Portuguese and Spanish markets maintained their upward trend for the second consecutive week, with increases of 3.3%, 3.6% and 22%, respectively. On the other hand, the German market registered a decline of 0.9%.

During the week, the Portuguese and French markets reached wind energy production records. On Monday, January 27, the Portuguese market registered its second highest value for a January ever, 108 GWh, after the one reached on January 5. A day later, the French market reached its second highest wind energy production value in history, 437 GWh, after the 441 GWh registered on November 24, 2024. Moreover, this production is the highest ever reached by this technology on a January day in France.

For the first week of February, according to AleaSoft Energy Forecasting’s wind energy production forecasts, production will decline in the main European markets.


AleaSoft - Wind energy production electricity EuropeSource: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.

Electricity demand

In the week of January 27, electricity demand fell across the main European electricity markets compared to the previous week. The Dutch market registered the largest drop, 11%, while the Spanish market showed the smallest fall, 0.7%. The Portuguese, Belgian, Italian, German, British and French markets registered declines ranging from 1.2% in Portugal to 4.0% in France. In this period, most markets maintained their downward trend for the second consecutive week, except for the British and Portuguese markets. The British market continued to decline for the third week, while the Portuguese market reversed the trend after four weeks of increases.

During the week, average temperatures were less cold than the previous week in most markets. Average temperature increases ranged from 0.6 °C in Italy to 1.7 °C in Belgium. In contrast, the Iberian Peninsula registered colder average temperatures than the previous week, with decreases of 1.0 °C in Portugal and 1.2 °C in Spain compared to the previous week.

For the first week of February, AleaSoft Energy Forecasting’s demand forecasts indicate increases in most major European electricity markets, except Portugal.


AleaSoft - Electricity demand European countriesSource: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.

European electricity markets

In the last week of January, the average prices of the main European electricity markets fell. The IPEX market of Italy registered the smallest decline, 7.8%, while the MIBEL market of Spain and Portugal registered the largest percentage price drop, 38%. In the other markets analyzed at AleaSoft Energy Forecasting, prices fell between 13% in the EPEX SPOT market of Germany and 28% in the Nord Pool market of the Nordic countries.

In the week of January 27, weekly averages were below €120/MWh in most analyzed European electricity markets. The exceptions were the N2EX market of the United Kingdom and the Italian market, which reached the highest weekly averages, €136.76/MWh and €141.95/MWh, respectively. The Nordic market registered the lowest average, €40.19/MWh. In the rest of the analyzed markets, prices ranged from €63.33/MWh in the Portuguese market to €117.12/MWh in the German market.

Regarding daily prices, in the last week of January, most analyzed electricity markets reached their lowest prices at the beginning of the week and, later, prices increased. However, the Nordic market reached its minimum price, €11.44/MWh, on Saturday, February 1. This was the lowest price of the week in the analyzed markets. The Portuguese and Spanish markets reached the second and third lowest prices on Tuesday, January 28, which were €16.37/MWh and €16.45/MWh, respectively. These were their lowest daily prices since the end of November 2024.

As a result of the upward trend registered during the week in most markets, on Sunday, February 2, prices exceeded €120/MWh in almost all analyzed markets, except in the Nordic market. On that day, the British, Spanish, French and Portuguese markets reached their highest daily prices of the last week of January. This had not happened in the Spanish and Portuguese markets since the end of 2024. The British market had not reached its weekly maximum on a Sunday since August 2024, while the French market had not done so since March 2022. The increase in gas and CO2 prices, together with the decrease in wind energy production on that day in Spain, France and Portugal contributed to this behavior.

In the week of January 27, the fall in demand and the increase in solar energy production led to a fall in weekly prices in European electricity markets. In addition, wind energy production rose in most analyzed markets.


AleaSoft - Solar Panels and wind farms

AleaSoft Energy Forecasting’s price forecasts indicate that, in the first week of February, prices will increase in European electricity markets, influenced by the increase in demand and the fall in wind energy production.


AleaSoft - European electricity market pricesSource: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.

Brent, fuels and CO2

Settlement prices of Brent oil futures for the Front‑Month in the ICE market reached their weekly maximum settlement price, $77.49/bbl, on Tuesday, January 28. In the following sessions of the last week of the month, settlement prices remained below $77/bbl. On January 29, these futures registered their weekly minimum settlement price, $76.58/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since January 9. On Friday, January 31, the settlement price was $76.76/bbl, 2.2% lower than the previous Friday.

Fears about the effects that US tariffs could have on global economic growth exerted their downward influence on Brent oil futures prices in the last week of January.

As for TTF gas futures in the ICE market for the Front‑Month, on Monday, January 27, the settlement price fell by 3.7% compared to the last session of the previous week. That price, €47.86/MWh, was the weekly minimum settlement price. In the rest of the sessions of the last week of January, prices increased. As a result, on Friday, January 31, these futures reached their weekly maximum settlement price, €53.24/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 7.1% higher than the previous Friday and the highest since mid‑October 2023.

Increased demand due to colder temperatures at the end of the week and the decrease in European reserves led to higher prices. In addition, the drop in gas supplies from Norway also contributed to the price increases in the last week of January.

Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2025, on Monday, January 27, they registered their weekly minimum settlement price, €79.36/t. In the remaining sessions of the last week of January, prices exceeded €80/t and registered an upward trend. As a result, on Friday, January 31, these futures registered their weekly maximum settlement price, €83.93/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 2.8% higher than the previous Friday and the highest since mid‑November 2023.


AleaSoft - Prices gas coal Brent oil CO2Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.

AleaSoft Energy Forecasting’s analysis on the prospects for energy markets and energy storage in Europe

On Thursday, February 13, AleaSoft Energy Forecasting will hold the 52nd webinar of its monthly webinar series. Tomás García, Senior Director, Energy & Infrastructure Advisory at JLL, will participate in the webinar. In addition to the evolution and prospects of European energy markets, the webinar will analyze the “contracted revenues” for BESS projects, through the capacity market and Optimizer Agreements.

 

Source: AleaSoft Energy Forecasting.

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