AleaSoft Energy Forecasting, July 22, 2024. In the third week of July, prices in most major European electricity markets continued to rise compared to the previous week. However, the drop in prices over the weekend meant that weekly price increases did not exceed 10%. Portugal broke the historical record for photovoltaic energy production again on July 16, while on July 18, France registered the highest production using this technology for a July month. On the same day, Italy registered the highest electricity demand so far in 2024.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of July 15, solar energy production increased compared to the previous week in Germany, France and Portugal. The German market registered the largest increase, which was 9.3%, followed by rises of 5.8% in the French market and 2.9% in the Portuguese market. In Portugal, solar energy generation rose for the third consecutive week, while in Germany and France, it was the second consecutive week of increases. In Spain, where it includes solar photovoltaic energy and solar thermoelectric energy, there was a 5.2% decrease. In Italy, solar energy production also fell compared to the second week of July, in this case by 0.9%.
During the third week of July, the Portuguese market broke the all‑time record for solar photovoltaic energy production again on Tuesday, July 16, with 23 GWh, surpassing that reached on Saturday, July 13. On the other hand, the French market registered the highest daily solar energy production for a July month on Thursday 18, with 127 GWh.
For the fourth week of July, according to AleaSoft Energy Forecasting’s solar energy production forecasts, in the German, Spanish and Italian markets, it will increase compared to the previous week.
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.
In the third week of July, wind energy production decreased in most major European electricity markets compared to the previous week. The French market was the only one to register an increase, 31%, while in the Spanish market production using this technology was similar to the previous week. On the other hand, the German market had the largest decrease, 15%, followed by the Italian market, with 14%. The Portuguese market had a slight drop, which was 0.1%.
According to AleaSoft Energy Forecasting’s wind energy production forecasts, in the week of July 22, it will increase in the German, Spanish, Portuguese and Italian markets. However, it will fall in the French market.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the third week of July, variations in electricity demand compared to the previous week had a heterogeneous behavior in the main European electricity markets. In the Italian, Spanish and French markets, demand increased. The Italian market registered the largest increase, 7.1%. In Spain, where demand increased for the fifth consecutive week, the rise was 3.4%, while the French market had the smallest increase, 1.6%. On the other hand, in the markets of Portugal, Great Britain, Belgium, Germany and the Netherlands, demand fell. In this case, the Portuguese market had the largest decline, 2.7%, followed by the Belgian, German and Dutch markets, with 0.8% declines in all three cases. The smallest drop in demand was in the British market, 0.6%. The German and Belgian markets maintained their declines for the third consecutive week.
On Thursday, July 18, the Italian market registered the highest demand of the current year, 1158 GWh.
During the week, average temperatures increased in all analyzed markets compared to the second week of July. The Belgian and Dutch markets registered the largest increases, 3.2 °C and 2.8 °C, respectively. In Great Britain, average temperatures increased by 2.4 °C. In the Iberian, Italian, German and French markets, increases ranged from 0.5 °C in Italy to 1.9 °C in France.
In the week of July 22, AleaSoft Energy Forecasting’s demand forecasts anticipate an increase in electricity demand compared to the previous week in the markets of Spain, Portugal and the Netherlands. On the other hand, demand will decrease in the markets of Germany, France, Belgium, Italy and Great Britain.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
In the third week of July, prices in the main European electricity markets rose compared to the previous week. However, the weekend price declines meant that the weekly average price increases did not exceed 10% compared to the previous week. The exception was the Nord Pool market of the Nordic countries, with an 11% decrease. The IPEX market of Italy registered the smallest increase, 2.2%. In contrast, the EPEX SPOT market of France registered the largest percentage price rise, 10%. In the other markets analyzed at AleaSoft Energy Forecasting, prices rose between 3.6% in the EPEX SPOT market of Germany and 8.0% in the MIBEL market of Spain.
In the third week of July, weekly averages were below €75/MWh in most analyzed European electricity markets. The N2EX market of the United Kingdom and the Italian market were the exceptions, with averages of €88.55/MWh and €115.27/MWh, respectively. The Nordic market registered the lowest weekly average, €24.63/MWh. In the rest of analyzed markets, prices ranged from €57.62/MWh in the French market to €73.82/MWh in the Portuguese market.
Regarding hourly prices, most analyzed European markets registered negative prices on July 20 and 21. The exceptions were the British, Italian and Nordic markets. The German, Belgian and Dutch markets also registered negative prices on July 15 and 16. On Tuesday, July 16, from 14:00 to 15:00, the German market registered the lowest hourly price of the third week of July, ‑€11.48/MWh.
During the week of July 15, the slight increase in the weekly average gas price and the fall in wind energy production in most analyzed markets led to higher prices in European electricity markets. Solar energy production also fell in the Spanish and Italian markets. In the case of Spain, France and Italy, moreover, electricity demand increased.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the fourth week of July, prices will be similar to those of the previous week. In some markets they will decline, while in others the increases will be smaller than in the third week of July. The recovery of wind and solar energy production in most analyzed electricity markets will contribute to this behavior.
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 began the third week of July with price declines. On July 17 and 18, prices recovered and on Thursday, July 18, these futures reached their weekly maximum settlement price, $85.11/bbl. However, on Friday, July 19, there was a 2.9% price drop from the previous day. On that day the settlement price was $82.63/bbl, the weekly minimum. According to data analyzed at AleaSoft Energy Forecasting, this price was 2.8% lower than the previous Friday and the lowest since mid‑June.
In the third week of July, concerns about demand in China, the strength of the dollar and the possibility of a truce in Gaza exerted their downward influence on Brent oil futures prices. However, the possibility of US interest rate cuts starting in September and supply concerns due to wildfires in Canada limited the price decline.
In the fourth week of July, the announcement of the withdrawal of US President Joe Biden’s candidacy for re‑election, as well as the evolution of the Middle East conflict, might influence prices of these futures.
As for TTF gas futures in the ICE market for the Front‑Month, on Monday, July 15, they registered their weekly minimum settlement price, €31.37/MWh. On Tuesday, July 16, there was a price rise of 5.9% over the previous day. As a result, on that day, the futures reached their weekly maximum settlement price, €33.24/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was the highest since July 5. In the last sessions of the week, prices were lower, but remained above €32/MWh. On Friday, July 19, the settlement price was €32.17/MWh, 1.4% higher than the previous Friday.
Supply levels and high European reserves kept settlement prices of TTF gas futures below €33/MWh in almost all sessions of the third week of July, despite rising temperatures in Europe. Forecasts of milder temperatures and higher wind energy production might exert their downward influence in the fourth week of July. In addition, operations at the Freeport liquefied natural gas export plant will progressively resume as repairs to the damage caused by Hurricane Beryl are completed.
Regarding settlement prices of CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they fell in almost all sessions of the third week of July. The exception was on Tuesday, July 16, when these futures reached their weekly maximum settlement price, €68.02/t. On the other hand, as a result of the registered declines, on Friday, July 19, these futures reached their weekly minimum settlement price, €66.30/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 4.2% lower than the previous Friday and the lowest since the end of April.
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 financing and valuation of renewable energy projects
In July, AleaSoft Energy Forecasting and AleaGreen have updated their long‑term price curve forecasts for European markets. These forecasts are essential for renewable energy project financing, risk management and hedging, PPA negotiation, portfolio valuation and audits, long‑term energy trading, among other uses related to renewable energy development.
Long‑term forecasting reports of AleaSoft Energy Forecasting and AleaGreen include hourly forecasts with thirty‑year horizons and confidence bands, as well as prices captured by wind and photovoltaic energy, and annual scenarios of the explanatory variables.
Source: AleaSoft Energy Forecasting.
