AleaSoft Energy Forecasting, May 27, 2024. In the week of May 20, prices in the main European electricity markets rose following increases in gas and CO2 prices. TTF gas and CO2 futures reached the highest values since the first half of December 2023 and January 2024, respectively. Even so, most markets registered negative hourly prices, primarily over the weekend. Solar photovoltaic energy set all‑time production records again in Spain, Portugal and Italy. Wind energy production declined in most markets.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of May 20, solar energy production increased in most major European electricity markets compared to the previous week. The Portuguese market registered the largest increase, 27%, followed by increases of 18% in the French market and 13% in the Spanish market. The Italian market registered the smallest increase, 7.6% in this case. The exception was the German market, where solar energy production decreased by 7.5%, reversing the upward trend of the last four weeks.
In the Spanish, Portuguese and Italian markets, solar photovoltaic energy set historical production records. On Friday, May 24, the Spanish and Portuguese markets registered their highest daily production ever, 196 GWh and 21 GWh, respectively. The Italian market registered the production record on Sunday, May 26, with a generation of 142 GWh using this technology.
In the last week of May, according to AleaSoft Energy Forecasting’s solar energy production forecasts, it will increase in Germany and Spain. On the other hand, solar energy production will decrease in Italy.
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 fourth week of May, wind energy production declined in most major European markets compared to the previous week, reversing the upward trend of the previous week. The decreases were 49% in the German market, 41% in the Portuguese market and 30% in the Spanish market. The exceptions were the Italian and French markets, where wind energy generation increased by 62% and 10%, respectively. Both markets reversed the downward trend they had shown in the last two weeks in the case of Italy and in the last four weeks in the case of France.
In the week of May 27, according to AleaSoft Energy Forecasting’s wind energy production forecasts, production using this technology will increase in Spain, France and Portugal. In Italy and Germany, it will decrease.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of May 20, electricity demand decreased in most major European electricity markets compared to the previous week. The declines were favored by lower labor hours due to the May 20 holiday, Pentecost Monday, celebrated in Germany, Belgium, France and some regions of Spain. The German market had the largest decline, 6.5%, followed by a 4.6% drop in the Belgian market and a 3.3% drop in the Portuguese market. The French and Spanish markets registered the smallest declines, 0.8% and 0.7%, respectively. However, in the Netherlands, Italy and Great Britain, demand increased. In the Dutch and British markets, demand rose for the second consecutive week, in this case by 3.7% and 0.4%, respectively. In Italy, the increase was 1.5%, registering rises for the third consecutive week.
During the week of May 20, average temperatures had heterogeneous behavior. In the Iberian Peninsula, Italy and France, average temperatures increased between 0.1 °C and 1.1 °C. On the other hand, in Germany, Belgium, Great Britain and the Netherlands, average temperatures decreased between 0.6 °C and 1.8 °C.
For the last week of May, according to AleaSoft Energy Forecasting’s demand forecasts, it will increase in the markets of Belgium, Germany, Spain, France and Italy, while it will decrease in the markets of Great Britain, Portugal and the Netherlands.
Source: 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 May, prices in most major European electricity markets increased between Monday, May 20, and Friday, May 24. Although prices fell over the weekend, the weekly averages of all analyzed markets rose compared to the previous week. The Nord Pool market of the Nordic countries reached the highest percentage price increase, 87%. In contrast, the IPEX market of Italy and the N2EX market of the United Kingdom registered the smallest percentage increases, 0.1% and 9.7%, respectively. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices rose between 30% in the EPEX SPOT market of Belgium and 71% in the MIBEL market of Portugal.
In the fourth week of May, weekly averages exceeded €45/MWh in most analyzed European electricity markets. The exceptions were the Nordic and French markets, with averages of €24.59/MWh and €36.50/MWh, respectively. The Italian market registered the highest weekly average, €96.18/MWh. In the rest of analyzed markets, prices ranged from €46.40/MWh in the Spanish market to €89.78/MWh in the British market.
Regarding hourly prices, most analyzed European markets registered negative prices on Sunday, May 26. The exceptions were the British and Italian markets, with no negative prices in the fourth week of May. The German, Belgian and Dutch markets also reached negative prices on May 20 and the last two markets, on May 22. In the case of the Nordic market, there were negative prices on May 25 and 26.
On Sunday, May 26, from 14:00 to 15:00, the German, Belgian, French and Dutch markets reached prices below ‑€23/MWh. The Dutch market registered the lowest hourly price of the fourth week of May, ‑€23.89/MWh.
On the other hand, on Monday, May 27, from 20:00 to 21:00, the German market reached a price of €221.46/MWh, the highest price since early December 2023 in this market.
During the week of May 20, the rise in the average price of gas and CO2 emission allowances had an upward influence on European electricity market prices. In addition, in markets such as Germany, Spain or Portugal, wind energy production decreased in the fourth week of May. In the case of the British, Italian and Dutch markets, electricity demand increased, contributing to weekly prices being higher than in the previous week.
AleaSoft Energy Forecasting’s price forecasts indicate that in some European electricity markets, such as the French, Spanish or Portuguese markets, prices might fall in the last week of May, influenced by the increase in wind energy production in these markets. On the other hand, in other markets such as Germany or Italy, where wind energy production might decrease, prices might continue to increase.
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 their weekly maximum settlement price, $83.71/bbl, on Monday, May 20. However, prices declined during the first four sessions of the fourth week of May. As a result, on Thursday, May 23, these futures registered their weekly minimum settlement price, $81.36/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 2.3% lower than the previous Thursday and the lowest since the first half of February. On Friday, May 24, there was a slight recovery and the settlement price was $82.12/bbl.
In the fourth week of May, expectations that interest rates will remain high in the United States for longer due to inflation exerted a downward influence on Brent oil futures prices. In addition, US oil reserves increased.
As for TTF gas futures in the ICE market for the Front‑Month, in the fourth week of May they continued with the price increases initiated in the last sessions of the previous week. On Monday, May 20, they registered their weekly minimum settlement price, €31.77/MWh, which was already 7.4% higher than the previous Monday. Price rises continued until Thursday, May 23. On that day, these futures reached their weekly maximum settlement price, €35.83/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 18% higher than the previous Thursday and the highest since the first half of December 2023. On Friday, May 24, after a 4.8% decrease, the settlement price was €34.11/MWh. This was still 11% higher than the previous Friday.
In the fourth week of May, forecasts of higher demand for air conditioning, combined with lower supply, drove prices higher. Forecasts of high temperatures for the coming summer and high demand for liquefied natural gas from the Asian market might continue to exert their upward influence on TTF gas futures prices. However, European reserve levels remain high. On the other hand, news that Russian gas supplies to Austria might end this summer due to legal problems in making payments also contributed to the price increase in the fourth week of May.
As for CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they reached their weekly minimum settlement price, €74.22/t, on Monday, May 20. However, this price was already 5.0% higher than the last session of the previous week and 6.3% higher than the previous Monday. On Tuesday, May 21, these futures registered their weekly maximum settlement price, €76.25/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 8.6% higher than the previous Tuesday and the highest since the first half of January. Subsequently, prices started a slight downward trend, although they remained above €75/t for the rest of the fourth week of May. On Friday, May 24, the settlement price was €75.62/t, still 7.0% higher than the previous Friday.
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 renewable energy projects financing
AleaSoft Energy Forecasting and AleaGreen will hold the next webinar in their monthly webinar series on Thursday, June 13. In addition to the evolution of European energy markets and the prospects in the second half of 2024, the webinar will analyze the growth opportunities in the renewable sector, the regulatory and design challenges of the wholesale market and the current affairs of the PPA market in Spain. This webinar will feature, for the sixth time, guest speakers from Engie Spain.
Source: AleaSoft Energy Forecasting.
