AleaSoft Energy Forecasting, July 10, 2023. In the first week of July, photovoltaic energy registered daily production records in Portugal and Germany. Also, Germany registered the highest daily wind energy production for a month of July. However, although solar energy production increased in all markets, wind energy production registered decreases in the majority, which led to a price increase in the European markets, a trend that was also favoured by the rise in temperatures, and with them in the demand of various markets.
Solar photovoltaic and thermoelectric energy production and wind energy production
In the week of July 3, solar photovoltaic energy production broke daily records in the Portuguese and German markets. On Tuesday, July 4, a generation of 15.1 GWh was registered in Portugal and, in Germany, the highest solar photovoltaic energy production to date was registered on Friday, July 7, with 360 GWh generated. In these two markets, hourly production records were also registered with this technology in the first week of July. In the case of Portugal, the record, with 1682 MWh generated, was reached on July 4 between 13:00 and 14:00 and, in Germany, on July 7 in the same time slot with 40 659 MWh generated.
Comparing the solar energy production for the first week of July with the previous week, increases were registered in all the main European markets analysed. The largest increase was in the German market, with an increase in production of 24%, followed by the French and Italian markets, with increases of 10% and 9.5%, respectively. In Portugal the increase was 6.4%, while in Spain the smallest increase was registered, of 0.2%.
For the week of July 10, the AleaSoft Energy Forecasting solar energy production forecasts indicate that production will decrease in the markets of Germany, Portugal and France. On the other hand, more generation is expected in the markets of Spain and Italy.
In the first week of July, wind energy production increased by 11% in the German market. In addition, in this market the highest production with this technology for a month of July was registered on the 5th, of 688 GWh.
However, in the rest of the main European markets analysed, wind energy production decreased in the week that began on July 3. The largest drop was registered in the Spanish market, which was of 42%, followed by drops of 32% and 18% in the Italian and Portuguese markets, respectively. In France, production with this technology had a reduction of 5.4%.
For the second week of July, the AleaSoft Energy Forecasting wind energy production forecasts indicate decreases in most analysed markets, except for the Spanish and Italian markets.Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
In the first week of July, electricity demand fell in most of the European markets analysed compared to the previous week. The largest drop, of 6.7%, was registered in the Netherlands market, followed by drops of 3.3% in Portugal and 1.0% in Germany. In the markets of Spain and Great Britain the fall was 0.7% in both cases.
On the other hand, the largest increase in demand was registered in the French market, which was 2.3%. In the markets of Belgium and Italy, demand rose by 0.2% and 0.1%, respectively.
The drop in demand in Portugal coincided with a drop in average temperatures of 0.6 °C. Likewise, the demand increase in France is related to a rise in average temperatures of 1.0 °C. In the rest of the analysed markets, the average temperature increased compared to the previous week, between 0.1 °C of Spain and Great Britain and 0.9 °C of the Netherlands.
For the week of July 10, according to the demand forecasts made by AleaSoft Energy Forecasting, an increase in demand is expected in most of the main European markets analysed, except in France and Belgium.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 July 3, prices of almost all European electricity markets analysed at AleaSoft Energy Forecasting increased compared to the previous week. The exception was the Nord Pool market of the Nordic countries, with a decrease of 14%. In the case of the IPEX market of Italy, the price remained stable with a slight upward trend, registering an increase of 0.7%. On the other hand, the largest rise in prices was that of the MIBEL market of Spain, of 20%. In the rest of the markets, prices increased between 6.6% of the EPEX SPOT market of Belgium and 18% of the EPEX SPOT market of the Netherlands.
In the first week of July, the weekly averages were below €95/MWh in most European electricity markets. The exceptions were the Italian market, with the highest average price, of €116.51/MWh, and the MIBEL market of Spain and Portugal, with averages of €104.34/MWh and €104.95/MWh, respectively. On the other hand, the lowest weekly average was that of the Nordic market, of €51.27/MWh. In the rest of the markets analysed, prices were between €82.94/MWh of the Dutch market and €94.73/MWh of the N2EX market of the United Kingdom.
Regarding hourly prices, despite the increase in weekly averages, some negative hourly prices were registered in the European markets. On Monday, July 3, negative prices were registered in the German, Belgian and Dutch markets. In the case of the German and Dutch markets, negative prices were also registered on Wednesday, July 5. There was also a negative‑priced hour in the Netherlands on Saturday, July 8. This market reached the lowest hourly price, of ‑€10.07/MWh. This price was registered on Monday, July 3, from 14:00 to 15:00.
During the week of July 3, the drop in wind energy production in most markets, in addition to the increase in demand in some cases, led to price increases in the European electricity markets, despite the slight decrease in the average price of gas and CO2 emission rights and the increase in solar energy production.
The AleaSoft Energy Forecasting price forecasts indicate that in the second week of July prices could increase in most of the European electricity markets, influenced by decreases in wind energy production. However, MIBEL market prices could drop due to increased production with this technology in the Iberian Peninsula.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, on Monday, July 3, registered the weekly minimum settlement price, of $74.65/bbl, which was 0.6% higher than that of the previous Monday. Settlement prices increased in most sessions of the first week of July. As a result, on Friday, July 7, the weekly maximum settlement price, of $78.47/bbl, was reached. This price was 4.8% higher than that of the previous Friday and the highest since May 1.
Production cuts by OPEC+ and Saudi Arabia planned for July exerted their upward influence on prices in the first week of the month. In addition, the announcement of cuts in Russian exports and Saudi Arabia production from August also influenced the evolution of prices during the first week of July.
Regarding TTF gas futures in the ICE market for the Front‑Month, on Monday, July 3, a settlement price of €33.93/MWh was registered. This price was 6.1% higher than that of the previous Monday, but 8.6% lower than that of the last session of the previous week. On Tuesday, July 4, the weekly maximum settlement price was reached, of €35.41/MWh. This price was 2.6% higher than that of the previous Tuesday. Subsequently, prices fell until registering the weekly minimum settlement price, of €32.35/MWh, on Thursday, July 6, which was 8.1% lower than that of the previous Thursday. The settlement price of Friday, July 7, was €33.48/MWh, which, despite being 3.5% higher than that of the previous day, was 9.8% lower than that of Friday of the previous week.
High levels of European reserves and abundant supply allowed TTF gas futures prices to decline until reaching the weekly minimum settlement price on Thursday, July 6, despite maintenance work in Norway. However, prices increased slightly on Friday, influenced by fears that the supply of liquefied natural gas would be diverted to Asia, where high temperatures caused demand increases.
Regarding CO2 emission rights futures in the EEX market for the reference contract of December 2023, on Monday, July 3, they reached the weekly maximum settlement price, of €87.32/t. This price was 1.2% higher than that of the previous Monday. For the rest of the days of the week, settlement prices were slightly lower, but remained above €85/t. The weekly minimum settlement price, of €85.81/t, was registered on Wednesday, July 5, and was 2.2% lower than that of the previous Wednesday.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
The next webinar of AleaSoft Energy Forecasting and AleaGreen monthly webinar series will take place this Thursday, July 13. The topics to be analysed will be the evolution of the energy markets, the use of probabilistic metrics to obtain long-term electricity markets price forecasts, the main vectors of the energy transition and the financing of renewable energy projects. Speakers from Banco Sabadell, Ecoener and Ben Oldman will participate in the analysis table that takes place in the second part of the webinar in Spanish.
Source: AleaSoft Energy Forecasting.