AleaSoft Energy Forecasting, March 27, 2023. In the fourth week of March, European electricity markets prices continued to fall, due to the decrease in gas and CO2 prices, the drop in demand and a high renewable energy production. In the last days of the week, negative or zero hourly prices were reached in several markets. The solar photovoltaic energy production reached its highest hourly value since April 2022 in Italy, while TTF gas futures registered the lowest prices since July 2021.
Solar photovoltaic and thermoelectric energy production and wind energy production
During the fourth week of March, the solar energy production increased compared to the previous week in most European markets analysed at AleaSoft Energy Forecasting. The rises were between 1.2% of the Italian market and 8.5% of the Portuguese market. However, in the French and German markets there were decreases of 3.8% and 21%, respectively.
On the other hand, on Saturday, March 25, from 12:00 to 13:00, a solar photovoltaic energy production of 12 180 MWh was registered in the Italian market, the highest since the first half of April 2022 in this market.
For the last week of March, the AleaSoft Energy Forecasting’s solar energy production forecasting indicates that the production might increase in Germany, but it might decrease in Spain and 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.
During the week of March 20, the wind energy production increased compared to the previous week in the German and French markets, by 9.8% and 17%, respectively. However, in the rest of European markets analysed at AleaSoft Energy Forecasting there were decreases, which were between 23% of the Spanish market and 33% of the Portuguese market.
For the week of March 27, the AleaSoft Energy Forecasting’s wind energy production forecasting indicates that the production might increase in the Spanish, Italian and Portuguese markets. But declines might be registered in the German and French markets.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of March 20, the electricity demand fell in almost all European markets analysed at AleaSoft Energy Forecasting compared to the previous week. The exception was the Belgian market, where the demand increased by 0.8%. On the other hand, the largest fall, of 7.6%, was that of the British market. In the rest of the markets, the demand fell between 2.2% of the Spanish market and 3.2% of the Dutch market.
In the fourth week of March, the general increase in average temperatures in European markets contributed to the drop in electricity demand. The largest rise in average temperatures compared to the previous week, of 2.3 °C, was registered in Italy, while the smallest increase, of 0.06 °C, was that of the Belgian market.
For the week of March 27, according to the demand forecasting made by AleaSoft Energy Forecasting, the demand is expected to increase in European markets.
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 March 20, prices of all European electricity markets analysed at AleaSoft Energy Forecasting fell compared to the previous week. The largest drop in prices, of 20%, was that of the EPEX SPOT market of the Netherlands. On the other hand, the smallest decrease, of 4.7%, was registered in the IPEX market of Italy. In the rest of the markets, the decreases were between 5.5% of the MIBEL market of Portugal and 19% of the EPEX SPOT market of Germany, France and Belgium and of the N2EX market of the United Kingdom.
In the fourth week of March, the highest average price, of €126.74/MWh, was that of the Italian market, followed by that of the British market, of €106.82/MWh. On the other hand, the lowest weekly average was that of the Nord Pool market of the Nordic countries, of €64.46/MWh. In the rest of the analysed markets, prices were between €76.22/MWh of the German market and €81.01/MWh of the French market.
Regarding hourly prices, in the last days of the fourth week of March, low prices were registered in many European markets. In the case of the Spanish market, on Saturday, March 25, from 15:00 to 16:00, a price of €0/MWh was registered, something that had not happened since the first day of the year. This price repeated on Sunday, March 26, between 11:00 and 18:00, in both the Spanish and the Portuguese markets. In the French, German and Belgian markets, on Saturday, March 25, prices reached negative values for four, seven and fourteen hours, respectively. But the lowest hourly price, of ‑€20.02/MWh, was reached on Monday, March 27, from 15:00 to 16:00, in the Dutch market. This price was the lowest in this market since the end of August 2022. On the other hand, in the Dutch market, on March 24, 25 and 27, a price of €0/MWh was registered for six hours and negative prices for another eighteen hours.
During the week of March 20, the decrease in average price of gas and CO2 emission rights, as well as the drop in electricity demand in most markets compared to the previous week, led to the decrease in prices in all analysed markets. In addition, the increase in solar energy production in markets such as the Spanish, the Italian and the Portuguese also had a downward influence on prices. In the case of the German and French markets, the increase in wind energy production also contributed to this behaviour. Likewise, in all analysed markets, the day with the highest wind energy production of the week was between Friday and Sunday, also contributing to the zero or negative prices registered in that period.
The AleaSoft Energy Forecasting’s price forecasting indicates that in the last week of March prices might increase in European electricity markets, influenced by the increase in demand and the decrease in renewable energy production in some markets.
Source: 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 below $80/bbl during the third week of March. The weekly minimum settlement price, of $73.79/bbl, was registered on Monday, March 20. This price was 8.6% lower than that of the previous Monday, but 1.1% higher than that of the last session of the previous week. The upward trend continued until Wednesday, March 22. That day the weekly maximum settlement price, of $76.69/bbl, was reached, which was 4.1% higher than that of the previous Wednesday. But, subsequently, decreases were registered and the settlement price of Friday, March 24, was $74.99/bbl.
Concerns about the evolution of the economy and its effects on the demand, aggravated by the instability in the banking sector, caused Brent oil futures prices to remain below $80/bbl during the fourth week of March.
As for settlement prices of TTF gas futures in the ICE market for the Front‑Month, during the fourth week of March, they oscillated around €41/MWh, registering lower values than those of the same days of the previous week. The weekly minimum settlement price, of €39.32/MWh, was reached on Monday, March 20. This price was 21% lower than that of the previous Monday and the lowest since the end of July 2021. On the other hand, the weekly maximum settlement price, of €43.19/MWh, was registered on Thursday, March 23, and it was 2.6% lower than that of the previous Thursday.
High temperatures and an abundant supply of liquefied natural gas allowed prices to remain below €45/MWh during the fourth week of March, despite the strikes at French regasification plants. But forecasts of cooler temperatures, coupled with maintenance work that might affect the supply from Norway, might exert an upward influence on prices in the coming days.
Regarding settlement prices of CO2 emission rights futures in the EEX market for the reference contract of December 2023, they increased during most days of the fourth week of March. The weekly minimum settlement price, of €87.83/t, was registered on Monday, March 20, and it was 9.6% lower than that of the previous Monday. On the other hand, on Thursday, March 23, the weekly maximum settlement price, of €92.58/t, was reached, which was 6.3% higher than that of the previous Thursday. But on Friday, there was a 5.3% drop compared to the previous day and a settlement price of €87.65/t was registered. This price was 0.4% higher than that of the previous Friday, but 0.2% lower than that of the first session of the week. Although prices had an upward trend during the week, for the week as a whole they registered a decrease of 1.3% compared to the average of the previous week.
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 energy storage
On Thursday, April 20, the next webinar of the series of monthly webinars of AleaSoft Energy Forecasting and AleaGreen will be held. This webinar will have the participation of Raúl García Posada, director of ASEALEN, the Spanish Association of Energy Storage. Another invited speaker, Jorge Barcelona de Pedro, Head of Sustainable Solutions at Rolls Royce Solutions Ibérica, will also participate in the analysis table of the Spanish version of the webinar. On this occasion, the analysed topics will be the evolution and prospects of European energy markets, as well as the vision of the future on the energy storage.
On the other hand, AleaGreen’s long‑term price forecasts are very useful for the optimisation of hybrid systems with energy storage, the valuation of assets, the negotiation of PPA or the renewable energy projects financing. AleaGreen’s forecasts, available for the main European markets, have a 30‑year horizon, hourly granularity and confidence bands. Furthermore, their scientific basis provides coherence and quality to the results.
