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Market price forecasting and its importance for renewable energies development

AleaSoft Energy Forecasting, May 10, 2022. Electricity, gas and CO2 markets prices were protagonists in recent months. In recent days, a large part of the headlines related to the Iberian market focused on the gas price limit that is expected to be approved in the coming days. All these topics will be analysed on May 12 in the webinar organised by AleaSoft, in addition to the importance of market price forecasting for the renewable energies development and AleaGreen, a new division of AleaSoft.

The next AleaSoft Energy Forecasting’s monthly webinar will be held on Thursday, May 12. The speakers will be Oriol Saltó i Bauzà and Alejandro Delgado, both Associate Partners at AleaGreen. Experts in the energy sector will participate in the analysis table of the Spanish version of the webinar, who have collaborated with AleaSoft Energy Forecasting for more than fifteen years: Alberto Ceña Lázaro, CEO of BEPTE, S.L., Antonio Canoyra Trabado, associate professor at the Department of Electric Power at the Comillas Pontifical University (ICAI), and Francisco Del Río, energy management expert.

Evolution and prospects of European energy markets

As usual in these webinars, an analysis of the energy markets evolution in recent weeks will be made, in which TTF gas prices were varying around €100/MWh and those of CO2 emission rights woke up and exceeded €90/t again on May 6, something that did not happen since February 23, just before the beginning of the Russian invasion of Ukraine. The webinar will also analyse how prices of Brent oil, coal and European electricity markets behaved, as well as the prospects in the mid‑ and long‑term.

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

Limit to the gas price in the Iberian electricity market

The webinar will also analyse the possible consequences of the gas price limit in the Iberian electricity market, which is expected to be approved in Spain on Friday, May 13, in an extraordinary Council of Ministers. According to what has come out so far, this limit will apply for twelve months in which the average gas price will be €50/MWh, although the limit will start at €40/MWh. By applying a limit of €40/MWh and with CO2 prices around €80/t, electricity market prices would be around €120/MWh at most, while if the gas price limit is at €60/MWh, prices in the electricity market would have a maximum of around €160/MWh. According to what is published so far, the difference between the electricity market price and the real cost of the plants that generate with gas will be paid by the buyers.

Market price forecasting and its importance for renewable energies development

Another topic that will be analysed in the webinar is the importance of the market price forecasting, at all horizons, for the renewable energies development. In addition to the market price curves forecasting with a 30‑year horizon and hourly granularity necessary for PPA, asset valuation and hybridisation with batteries, short‑ and mid‑term forecasting is needed to operate the plants in the day‑ahead, intraday, adjustment services and futures markets once these are in operation, and in the case of plants in which renewable energies are hybridised with energy storage, to plan the system operation in such a way as to optimise the storage and maximise profits. In addition, the forecasting of other variables such as temperature, electricity demand and production with renewable energies are very useful in control centres to monitor the operation of electrical systems or the plant, to plan maintenance or in smartgrids to be able to balance generation and demand in real time and automatically and intelligently.

AleaGreen and Alea Energy DataBase (AleaApp)

The webinar will also inform about AleaGreen, the new division of Alea Business Software S.L specialised in long‑term price curves forecasting reports for European markets, which will act as a hub to connect the renewable energy sector with financial institutions and investment funds, producers and large consumers, to explore synergies and opportunities. In addition, the Alea Energy DataBase (AleaApp) platform for the compilation, visualisation and analysis of energy markets data will be shown.

In AleaSoft Energy Forecasting, the email was enabled, to which questions can be sent in advance so that they can be answered in the webinar.

Source: AleaSoft Energy Forecasting.

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