AleaSoft Energy Forecasting, September 4, 2024. In August, prices in most electricity markets rose compared to July, mainly due to higher gas and CO2 prices. Lower wind and solar energy production in most markets also contributed to this trend, despite lower demand in most markets. Monthly photovoltaic energy production reached record highs in France and Portugal, while Germany, Spain and Italy registered the second highest levels of photovoltaic energy generation. In the Spanish market, the price factor of solar photovoltaic energy increased to 72% in August.
Solar photovoltaic, solar thermoelectric and wind energy production
In August 2024, all major European electricity markets registered increases in solar energy production compared to the same month of last year. The Portuguese market registered the largest increase, 53%, while the Italian market registered the smallest rise, 13%. In the other analysed markets, solar energy production increased between 18% in Spain and 39% in Germany.
Compared to July 2024, solar energy production in August was slightly higher in the Portuguese and French electricity markets, with growths of 0.2% and 1.2%, respectively. In the rest of analysed markets, production with this technology was lower than the previous month. The Spanish market registered the largest month‑on‑month drop, 5.6%, followed by falls of 5.4% in Italy and 4.4% in Germany.
In August 2024, the markets of France and Portugal broke historical records for monthly solar photovoltaic energy production of 3100 GWh and 643 GWh, respectively. On the other hand, the German, Spanish and Italian markets registered their second highest production values using this technology, following the records obtained the previous month. On this occasion, production was 9047 GWh in Germany, 6012 GWh in Spain and 3434 GWh in Italy.
According to data from Red Eléctrica, between August 2023 and August 2024, 4074 MW of new capacity was installed in Mainland Spain. In the same period, the Portuguese market increased its photovoltaic capacity by 1126 MW.
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 August 2024, the price captured by solar photovoltaic energy in the day‑ahead electricity market in Spain rose to €65.67/MWh, after bottoming out in April this year, with a historically low captured price of only €5.50/MWh. The price factor of solar photovoltaic energy also rebounded to 72% in August, up from a low of 40% in April.
The price captured by this technology started the year at high levels, standing at €64.49/MWh in January, but as demand decreased and renewable energies remained robust during the spring, prices fell and, already in March, the captured price dropped below €10/MWh. The situation of very low, zero and even negative prices during March, April and May, especially during peak solar energy production hours, led to historic lows for both market prices and prices captured by solar energy. From June onwards, the situation improved and, although prices continued to be lower during solar hours, captured prices and price factor began to rise, with August reaching the highest captured price so far this year.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE.
In August 2024, wind energy production decreased in all major European electricity markets compared to the same month in 2023. Declines ranged from 4.9% in the German market to 48% in the Italian market.
Compared to the previous month, wind energy production increased by 2.3% in the French market and by 12% in the Portuguese market. The rest of the analysed markets registered decreases, ranging from 7.5% in Germany to 23% in Italy.
According to data from Red Eléctrica, between August 2023 and August 2024, Spain added 930 MW of wind energy capacity to the peninsular system. In the same period, the Portuguese market added 31 MW of new wind energy capacity.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Electricity demand
In August 2024, electricity demand increased in most major European electricity markets compared to the same period in 2023. The Italian market registered the largest increase, 6.6%, while the French market registered the smallest increase, 2.2%. In contrast, the Dutch, British and Portuguese markets registered a year‑on‑year decrease in demand. The Dutch market registered the largest drop, 6.9%. The Portuguese and British markets fell by 0.6% and 2.6% respectively.
When comparing electricity demand in August with that of July 2024, most markets registered decreases. Belgium and the Netherlands were the only markets where demand increased compared to the previous month, by 1.7% and 3.0%, respectively. In terms of decreases, the Italian market registered the largest drop, 12%, while the German market registered the smallest decrease, 0.1%. In the other analysed markets, declines ranged from 4.9% in Great Britain to 1.4% in Spain.
In most major European electricity markets, August 2024 was warmer than the same month in 2023. The increase in average temperatures ranged from 0.4 °C in France to 2.0 °C in Italy. In Portugal and Spain, average temperatures decreased by 0.5 °C and 0.1 °C, respectively.
In contrast, average temperatures in August were higher than in the previous month in all analysed markets. Increases compared to the previous month ranged from 0.6 °C in Italy and Great Britain to 1.3 °C in the Netherlands.
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 month of August 2024, the monthly average price was above €65/MWh in most major European electricity markets. The exceptions were the averages in the Nord Pool market of the Nordic countries and the EPEX SPOT market of France, €15.35/MWh and €54.56/MWh, respectively. In contrast, the IPEX market of Italy registered the highest monthly price, €128.44/MWh. In the rest of the European electricity markets analysed at AleaSoft Energy Forecasting, the averages ranged from €65.53/MWh in the EPEX SPOT market of Belgium to €91.11/MWh in the MIBEL market of Portugal.
Compared to July, average prices rose in most European electricity markets analysed at AleaSoft Energy Forecasting. The exceptions were the N2EX market of the United Kingdom and the Nordic market, with falls of 14% and 37%, respectively. In the rest of markets, prices increased between 14% in the Italian market and 26% in the Spanish market.
In contrast, comparing average prices in August with those registered in the same month of 2023, prices fell in most analysed markets. In this case, the exception was the Italian market, with a price increase of 15%. On the other hand, the Nordic market registered the largest percentage price drop, 55%. In the remaining markets, price decreases ranged from 5.2% in the Spanish market to 40% in the French market.
As a consequence of the price drop in August 2024, the British market reached the lowest average since May 2024, while the Nordic market registered the lowest average since October 2023. In contrast, the Portuguese and Spanish markets reached the highest averages since October 2023 and the Italian market registered the highest monthly average since November 2023. As for the averages of the Belgian and Dutch markets, they were the highest since February 2024, while the French market had the highest average price since March 2024.
In August 2024, the increase in gas and CO2 emission allowance prices compared to the previous month, as well as the decrease in wind and solar energy production compared to July in most analysed markets, favoured the price rises in European electricity markets.
On the other hand, in August 2024, the fall in the average price of CO2 emission allowances and the general increase in solar energy production compared to August 2023 led to a year‑on‑year decrease in European electricity market prices. However, the increase in electricity demand and the significant decrease in wind energy production in Italy, as well as the increase in the average gas price, contributed to the year‑on‑year increase in prices in the Italian market.
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 registered a monthly average price of $78.88/bbl in the month of August. This value was 6.0% lower than that of the July Front‑Month futures, $83.88/bbl. The price was also 7.3% lower than the average of the August 2023 Front‑Month futures, $85.10/bbl.
During August, the evolution in the Middle East conflict exerted its influence on Brent oil futures prices. This influence was both downward during the Gaza ceasefire talks and upward at times of heightened tension. Production declines in Libya also exerted an upward influence. However, economic and demand concerns, as well as OPEC+ plans to increase production in the last quarter of 2024, contributed to the average price decline in August.
As for TTF gas futures in the ICE market for the Front‑Month, the average value registered during the month of August for these futures was €38.35/MWh. According to data analysed at AleaSoft Energy Forecasting, compared to the average of the Front‑Month futures traded in July, €32.68/MWh, the August average increased by 17%. When compared to the Front‑Month futures traded in August 2023, when the average price was €35.00/MWh, there was an increase of 9.6%.
During August, supply concerns due to instability in the Middle East and the conflict between Russia and Ukraine exerted an upward influence on TTF gas futures prices. Planned maintenance work in Norway also contributed to price increases. However, high levels of European reserves prevented the average price from exceeding €40/MWh in August 2024.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they reached an average price of €71.26/t in August. According to data analysed at AleaSoft Energy Forecasting, this represents an increase of 4.5% compared to the previous month’s average, €68.17/t. Compared to the August 2023 average, €90.33/t, the August 2024 average was 21% lower.
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
Long‑term price forecasts are necessary for renewable energy project financing, risk management and hedging, PPA negotiation, portfolio valuation and audits, long‑term energy trading and other uses related to renewable energy development. AleaSoft Energy Forecasting and AleaGreen provide long‑term price curve forecasting reports for electricity markets. These price forecasts are based on a unique scientific methodology that combines Artificial Intelligence, time series and statistical models. In addition, forecasts of AleaSoft Energy Forecasting and AleaGreen have hourly granularity, 30‑year horizons and confidence bands.
Source: AleaSoft Energy Forecasting.
