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Prices fall in most European electricity markets while the German market breaks historical price and photovoltaic energy records

AleaSoft Energy Forecasting, July 1, 2024. In the last week of June, prices in most major European electricity markets fell compared to the previous week. The exceptions were the Iberian and German markets. In the latter, the weekly average increased due to the price of €2325.83/MWh reached in one hour on June 26, when the single European market decoupled. This is the highest price ever registered in the history of the German market. Photovoltaic energy reached an all‑time production record in Germany on the 25th, and a day earlier, France registered the highest value for a June month.

Solar photovoltaic, solar thermoelectric and wind energy production

In the week of June 24, solar energy production increased compared to the previous week in most major European electricity markets. The French market registered the largest increase, 27%, followed by a 23% rise in the German market. In the Italian market, the increase was 1.6%. On the other hand, the Iberian market registered decreases in solar energy production. In the case of the Portuguese market, the drop was 14%, while in the Spanish market, which includes solar photovoltaic energy and solar thermoelectric energy, it was 8.4%.

The French market registered the highest daily solar energy production for a June month on Monday, June 24, at 122 GWh. Subsequently, on Tuesday, June 25, the German market registered an all‑time production record with 433 GWh of generation.

For the week of July 1, according to AleaSoft Energy Forecasting’s solar energy production forecasts, in the Spanish market production will increase compared to the previous week, while it will decrease in the German and Italian markets.

AleaSoft - Solar photovoltaic thermosolar 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 fourth week of June, wind energy production increased in the German, Spanish and Italian markets compared to the previous week. The German market reached the largest increase, which was 7.6%, followed by a 4.9% increase in the Spanish market. The Italian market registered an increase of 0.8%. On the other hand, the Portuguese and French markets continued their downward trend for the second consecutive week. On this occasion, declines were 27% in the Portuguese market and 23% in the French market.

According to AleaSoft Energy Forecasting’s wind energy production forecasts, in the first week of July, production using this technology will increase across the board in the analyzed European electricity 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 last week of June, electricity demand increased in most major European electricity markets compared to the previous week. The Spanish market registered the largest increase, 4.0%, followed by rises of 3.6% in the Belgian market and 1.8% in the French market. In the German, Portuguese and British markets, demand increased by 0.5%, 0.3% and 0.2%, respectively. In the German market, the upward trend continued for the fifth consecutive week, while in the markets of Spain, Belgium, France and Portugal it continued for the second week. On the other hand, the Netherlands and Italy were the exception, with demand falling in these markets. In the Dutch market it fell by 7.5%, while in the Italian market it fell by 0.4%.

During the week, average temperatures increased compared to the previous week in the vast majority of the analyzed markets. In the markets of France, Germany, Belgium and the Netherlands, increases ranged from 2.6 °C in France to 4.1 °C in the Netherlands. The markets of Great Britain, Spain and Portugal had the smallest increases, 1.8 °C, 1.4 °C and 1.0 °C, respectively. On the other hand, the Italian market was the exception with a 0.5 °C decrease in average temperatures.

According to AleaSoft Energy Forecasting’s demand forecasts, in the first week of July, it will increase compared to the previous week in the markets of the Netherlands, Italy, Great Britain, Portugal and Spain. On the other hand, it will decrease in Belgium, France and Germany.

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 fourth week of June, prices in most major European electricity markets decreased compared to the previous week. The exceptions were the MIBEL market of Spain and Portugal and the EPEX SPOT market of Germany, with increases of 19%, 22% and 64%, respectively. The EPEX SPOT market of France registered the largest percentage price drop, 29%. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices fell between 7.2% in the IPEX market of Italy and 20% in the Nord Pool market of the Nordic countries.

In the fourth week of June, weekly averages were below €75/MWh in most analyzed European electricity markets. The exceptions were the N2EX market of the United Kingdom, as well as the Italian and German markets, with averages of €83.98/MWh, €101.90/MWh and €132.70/MWh, respectively. The Nordic and French markets registered the lowest weekly averages, €27.08/MWh and €36.33/MWh, respectively. In the rest of the analyzed markets, prices ranged from €60.41/MWh in the Belgian market to €72.60/MWh in the Portuguese market.

On the other hand, on June 25, the single European market decoupled and operations involving international electricity exchanges were not possible, which affected European market prices on June 26. In the case of the German market, on June 26, from 6:00 to 7:00, the price was €2325.83/MWh. This price is the highest in the history of the German market.

During the week of June 24, the decline in weekly gas and CO2 emission allowance prices exerted a downward influence on European electricity market prices. However, the fall in wind and solar energy production in the Iberian Peninsula contributed to the increase in MIBEL market prices. In the case of the German market, the high prices registered on Wednesday, June 26, led to an increase in the weekly average.

AleaSoft - Solar

AleaSoft Energy Forecasting’s price forecasts indicate that, in the first week of July, prices will rise again in most analyzed markets. However, in the German, Spanish and Portuguese markets, prices might fall, influenced by higher levels of wind energy production and, in the case of Spain, also of solar 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 remained above $85/bbl in the fourth week of June. After a 1.2% drop compared to the previous day, they registered their weekly minimum settlement price, $85.01/bbl, on Tuesday, June 25. In the rest of the week’s sessions, prices increased. On Friday, June 28, these futures reached their weekly maximum settlement price, $86.41/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 1.4% higher than the previous Friday and the highest since early May.

In the fourth week of June, supply concerns due to the evolution of the conflict in the Middle East drove Brent oil futures prices up.

As for TTF gas futures prices in the ICE market for the Front‑Month, on June 24 and 25 they increased. On Tuesday, June 25, these futures registered their weekly maximum settlement price, €34.85/MWh. However, on Wednesday, June 26, there was a 3.0% drop compared the previous day and the settlement price was €33.82/MWh. This was the weekly minimum settlement price and the lowest since June 8. On Thursday and Friday prices recovered. On Friday, June 28, the settlement price was €34.48/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 1.6% higher than the previous Friday.

Despite potential supply problems to refill European reserves for the coming winter, their levels remain high. This contributed to TTF gas futures prices remaining below €35/MWh in the fourth week of June.

Regarding settlement prices of CO2 emission allowance futures in the EEX market for the reference contract of December 2024, in the fourth week of June they remained below €68/t. On Tuesday, June 25, these futures reached their weekly maximum settlement price, €67.92/t. On the other hand, on Thursday, June 27, they registered their weekly minimum settlement price, €66.67/t. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since the end of April. After a rise of 1.2%, on Friday, June 28, the settlement price was €67.47/t, 1.0% lower than the previous Friday.

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 in Europe, PPA and energy transition

On Thursday, July 11, AleaSoft Energy Forecasting and AleaGreen will hold the 46th webinar in their monthly webinar series. In addition to the evolution and prospects of European energy markets, the webinar will analyze price cannibalization, low prices, price factor of renewable technologies, the prospects for photovoltaic energy, batteries and hybridization, as well as PPA from the point of view of large and electro‑intensive consumers. On this occasion, there will also be an explanation of the new AleaSoft divisions to boost renewable energy and energy transition. The analysis table of the webinar in Spanish will have the participation of guest speakers from AEGE, Banco Sabadell, Axpo Iberia and CESCE.

Source: AleaSoft Energy Forecasting.

 

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