AleaSoft Energy Forecasting, October 2, 2024. In the third quarter of 2024, European electricity market prices rose compared to the previous quarter, despite solar photovoltaic energy production reaching historical records in several markets. Market price rises were driven by higher gas prices, increased demand in most markets as summer temperatures rose, and declining wind energy production. Electricity demand increased year-on-year in most markets even though average temperatures were mostly lower than in the same period last year.
Solar photovoltaic and wind energy production
In the third quarter of 2024, solar photovoltaic energy production increased in all major European electricity markets compared to the same period in 2023. The Portuguese market registered the largest increase, 51%. The Spanish, German and Italian markets also registered double‑digit increases, 24%, 20% and 13%, respectively. The French market registered the smallest increase, 8.8%.
Compared to the second quarter of 2024, in the third quarter of the year there was also an increase in solar photovoltaic energy production in all markets. Increases in the Portuguese, French and Spanish markets were 23%, 9.8% and 9.8% in each case. The German and Italian markets registered increases of 1.9% and 0.9%, respectively.
In the German, Spanish, Italian, French and Portuguese markets, quarterly solar photovoltaic energy production was the highest of all quarters in history, reaching 24 873 GWh, 15 136 GWh, 9565 GWh, 8279 GWh and 1766 GWh, respectively.
The above data reflect the increase in the installed capacity of photovoltaic energy. In the case of Spain, according to data from Red Eléctrica, between the second and third quarter of 2024, this capacity increased by 1026 MW. Similarly, according to REN data, in Portugal installed photovoltaic capacity increased by 289 MW in the same period.
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.
When comparing wind energy production in the third quarter of 2024 with the same quarter of 2023, there was an increase in the French, German and Spanish markets. Increases ranged from 3.0% in the French market to 9.0% in the Spanish market. In contrast, the Italian and Portuguese markets registered decreases in wind energy production of 22% and 6.2%, respectively.
In line with the seasonal transition from spring to summer, wind energy production declined in all major European electricity markets when comparing data for the third quarter of 2024 with the previous quarter. The Italian market registered the largest decrease, 28%. In the rest of the markets, declines ranged from 7.1% in Spain to 11% in Portugal.
According to data from Red Eléctrica, between June and September 2024, installed wind capacity increased by 59 MW. In the case of Portugal, according to data published by REN, installed wind capacity increased by 25 MW.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Electricity demand
In the third quarter of 2024, electricity demand increased compared to the same period of the previous year in most major European electricity markets. The Belgian market registered the largest increase, 5.1%, followed by the Italian and German markets, which each increased by 2.5% and 2.3%. Demand increased by 1.3% in the Spanish and British markets, and by 1.0% in the French market. The Portuguese market registered the smallest increase, 0.8%. The exception to the upward trend was the Dutch market, where demand fell by 5.3%.
Comparing the second and third quarters of 2024, demand increased in the German, Dutch and Southern European markets. The Italian market registered the largest increase, 13%. The Spanish market followed it with an increase of 9.7%. The Dutch, Portuguese and German markets registered smaller increases, 6.7%, 4.0% and 1.9%, respectively. In the rest of analysed markets, demand decreased between 2.2% in the British market and 3.1% in the French market.
The year‑on‑year evolution of average temperatures showed a clear downward trend when comparing the third quarter of 2024 with the third quarter of 2023. Average temperatures decreased in most analysed markets. The decreases ranged from 0.1 °C in the Netherlands to 1.2 °C in France. The exceptions were Germany and Italy. In the first, average temperatures were similar to those of the same quarter of the previous year, and in the second, they increased by 0.3 °C.
Compared to the second quarter of 2024, average temperatures in the predominantly summery third quarter increased in all analysed markets. Increases ranged from 3.2 °C in Great Britain to 6.6 °C in Italy.
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 third quarter of 2024, the quarterly average price remained below €85/MWh in most major European electricity markets. The exception was the IPEX market of Italy, with an average of €119.32/MWh. The Nord Pool market of the Nordic countries registered the lowest quarterly price, €19.86/MWh. In the other markets analysed at AleaSoft Energy Forecasting, averages ranged from €51.14/MWh in the EPEX SPOT market of France to €81.72/MWh in the N2EX market of the United Kingdom.
Compared to the previous quarter, in the third quarter of 2024 average prices rose in almost all European electricity markets analysed at AleaSoft Energy Forecasting. The exception was the Nordic market, with a drop of 44%. In contrast, the MIBEL market of Portugal and Spain registered the largest increases, 134% and 136%, respectively. The rest of the markets registered price increases ranging from 5.9% in the British market to 71% in the French market.
Comparing average prices in the third quarter of 2024 with those registered in the same quarter of 2023, prices decreased in almost all analysed markets. The exception was the Italian market, with an increase of 5.4%. In terms of price declines, the French market registered the largest drop, 40%. In contrast, the British market had the smallest decrease, 10%. In the other markets, price declines ranged from 16% in the German and Dutch markets to 29% in the Belgian market.
As a result of the price declines in the Nordic market, the price of the third quarter of 2024 was the lowest since the first quarter of 2021 in that market.
In the third quarter of 2024, higher gas prices compared to the previous quarter, falling wind energy production and increased demand in most markets led to higher prices in European electricity markets compared to the previous quarter, despite lower CO2 emission allowance prices and increased solar energy production.
When compared to the third quarter of 2023, CO2 emission allowance prices decreased, solar energy production increased in all analysed markets and wind energy production grew in most of them. This contributed to the year‑on‑year price declines in the electricity markets, despite rising gas prices and increased electricity demand.
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 quarterly average price of $78.71/bbl in the third quarter of 2024. This value was 7.4% lower than that of the previous quarter’s Front‑Month futures, $85.03/bbl. It was also 8.4% lower than the corresponding value for the Front‑Month futures traded in the third quarter of 2023, $85.92/bbl.
During the third quarter, instability in the Middle East and expectations of lower interest rates exerted an upward influence on Brent crude oil futures prices. In addition, OPEC+ production cuts, expectations of higher demand due to holiday travel, concerns about Canadian supply due to wildfires, the effects of Hurricane Francine and supply disruptions in Libya also pushed prices higher during the quarter. However, concerns about demand evolution continued during the third quarter and the quarterly average price declined. In September, OPEC and the International Energy Agency revised their demand forecasts downwards, which contributed to price declines. In addition, the planned increase in OPEC+ production in the last quarter of the year also contributed to these declines.
As for TTF gas futures in the ICE market for the Front‑Month, the average value registered during the third quarter of 2024 for these futures was €35.69/MWh. Compared to the average of the Front‑Month futures traded in the previous quarter, €31.78/MWh, the average increased by 12%. Compared to the Front‑Month futures traded in the same quarter of 2023, when the average price was €33.82/MWh, there was an increase of 5.5%.
In the third quarter of 2024, supply concerns due to the Russia‑Ukraine conflict and instability in the Middle East exerted an upward influence on TTF gas futures prices. Maintenance work in Norway also contributed to the price increase. In addition, problems at the Freeport export plant, Hurricane Francine and high Asian demand affected the liquefied natural gas supply. However, high levels of European reserves limited price increases.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they reached an average price of €68.36/t in the third quarter of 2024, 1.9% lower than the previous quarter’s average, €69.68/t. Compared to the average for the same quarter of 2023, €89.99/t, the average for the third quarter of 2024 was 24% 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
AleaSoft Energy Forecasting and AleaGreen provide long‑term price curve forecasting reports for electricity markets. Long‑term price forecasts are necessary for renewable energy project financing, risk management and hedging, PPA negotiation, long‑term energy trading, portfolio valuation and audits. AleaSoft Energy Forecasting and AleaGreen forecasts are based on a unique scientific methodology that combines Artificial Intelligence, time series and statistical models. In addition, these price forecasts have hourly granularity, 30‑year horizons and include confidence bands.
Source: AleaSoft Energy Forecasting.
