AleaSoft Energy Forecasting, December 16, 2024. In the second week of December, prices in the main European electricity markets continued to rise, with most of them reaching weekly averages above €120/MWh. Almost all markets reached the highest daily price since at least March 2023, mainly on Thursday, December 12. The increase in electricity demand associated with colder temperatures coupled with lower wind energy production favored the increase in prices. Gas prices were lower than the previous week, but they remained above €41/MWh. Photovoltaic energy reached production records for a day in December in Spain and Portugal.
Solar photovoltaic and wind energy production
In the week of December 9, solar photovoltaic energy production increased in the Iberian and Italian markets compared to the previous week. The Portuguese market maintained its upward trend for the third consecutive week and registered the largest increase, 13%. The Spanish market continued to increase for the fourth week, this time by 1.1%, while the Italian market registered growth of 1.7%, after three weeks of declines. On the other hand, the French and German markets registered declines in generation with this technology for the second consecutive week. The German market registered the largest decline, 48%, while the French market registered a 10% reduction.
During the week, the Portuguese, Spanish and Italian markets reached historical records for solar photovoltaic energy production for a day in December. The Spanish market registered the highest production for a day in December on the 10th, with 90 GWh. Portugal reached the record on Monday, December 9, followed closely by production on Tuesday, December 10. In both cases, production was 12 GWh, beating the record previously registered on Sunday, December 8, which was 11 GWh. On the other hand, the Italian market registered its second highest value for a day in December on Thursday, December 12, with 44 GWh of photovoltaic energy generation.
For the week of December 16, AleaSoft Energy Forecasting’s solar energy production forecasts indicate increases compared to the previous week in the German, Italian and Spanish markets.
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 second week of December, wind energy production declined in the main European electricity markets compared to the previous week. The French market registered the largest drop, 41%, followed by decreases of 31% in the Spanish market and 24% in the Portuguese market. These markets registered a trend reversal, following increases in the previous week. The German and Italian markets registered decreases in wind energy generation for the third week, this time of 20% and 22%, respectively.
For the third week of December, AleaSoft Energy Forecasting’s wind energy production forecasts show general increases in wind energy production in all major European electricity markets compared to the previous week.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of December 9, electricity demand increased in most major European electricity markets compared to the previous week. The French and Spanish markets registered the largest increases, both by 11%. The German market showed the smallest increase, 0.1%. The Belgian, British, Dutch and Portuguese markets registered increases ranging from 2.2% in the Belgian market to 8.1% in the Portuguese market. With the exception of the Spanish market, where demand fell the previous week due to the national holiday of December 6, Constitution Day, the markets that registered increases during the week continued the upward trend for the second consecutive week. In contrast, in the Italian market, demand decreased by 2.1% after five weeks of increases.
Average temperatures continued to decrease in all analyzed markets compared to the previous week. The Iberian Peninsula led these declines with drops of 4.8 °C in Portugal and 4.7 °C in Spain. On this occasion, Italy showed the smallest reduction, 0.2 °C. Germany, Great Britain, the Netherlands, France and Belgium registered decreases ranging from 1.5 °C in Germany to 3.3 °C in Belgium.
For the third week of December, AleaSoft Energy Forecasting’s demand forecasts indicate decreases in electricity demand in most analyzed European markets, except in the German market, where it will increase.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
In the second week of December, average prices in most major European electricity markets increased compared to the previous week. The exception was the Nord Pool market of the Nordic countries, with a slight decrease of 0.7%. In terms of increases, the IPEX market of Italy registered the smallest percentage price increase compared to the previous week, 3.2%. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices rose between 18% in the MIBEL market of Spain and Portugal and 55% in the EPEX SPOT market of Germany.
In the second week of December, weekly averages exceeded €120/MWh in most analyzed European electricity markets. The exception was the Nordic market, which registered the lowest average, €45.17/MWh. The Dutch and German markets reached the highest weekly averages, €165.41/MWh and €176.85/MWh, respectively. In the rest of the analyzed markets, prices ranged from €123.25/MWh in the Spanish market to €156.19/MWh in the N2EX market of the United Kingdom.
Regarding daily prices, most markets registered their highest prices of the week on December 12. On that day, the Belgian, British and Dutch markets reached their highest daily prices since December 2022. The Iberian market registered its highest price since March 2023. On the other hand, on December 11, the Italian market reached its highest price since January 2023, while on December 13, the French market registered its highest price since February 2023.
In the week of December 9, despite the decline in weekly gas prices, the increase in electricity demand and the fall in wind energy production led to higher weekly prices in the European electricity markets. Solar energy production also fell in the German and French markets.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the third week of December, prices will fall in European electricity markets, influenced by increased wind energy production and falling demand in most markets. In addition, solar energy production will increase in the German, Spanish and Italian markets.
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 price increases in most sessions of the second week of December. On Monday, December 9, these futures registered their weekly minimum settlement price, $72.14/bbl. As a result of the upward trend, on Friday, December 13, these futures reached their weekly maximum settlement price, $74.49/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 4.7% higher than the previous Friday and the highest since November 22.
In the second week of December, prospects of increased sanctions on Russia and Iran and instability in the Middle East drove Brent oil futures prices higher. Plans to stimulate the Chinese economy and expectations of US interest rate cuts, as well as cuts made by the Canadian, European and Swiss central banks, also contributed to the price increases.
As for TTF gas futures in the ICE market for the Front‑Month, they registered price declines in all sessions of the second week of December, except on December 10. On that day, these futures reached their weekly maximum settlement price, €45.55/MWh. On the other hand, as a result of the price declines registered during the week, on Friday, December 13, these futures registered their weekly minimum settlement price, €41.22/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 11% lower than the previous Friday and the lowest since November 7.
Stability in gas supply, as well as forecasts of milder temperatures, led to lower prices for TTF gas futures.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they started the second week of December with a price drop of 2.8% compared to the last session of the previous week, registering a settlement price of €66.37/t on Monday, December 9. Subsequently, prices recovered and on December 11, these futures reached their weekly maximum settlement price, €68.63/t. In the last sessions of the week, prices declined again. On Friday, December 13, these futures registered their weekly minimum settlement price, €64.43/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 5.7% lower than the previous Friday and the lowest since November 7.
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 energy transition
On Thursday, December 12, AleaSoft Energy Forecasting held the 50th webinar in its monthly webinar series. The webinar coincided with the fifth anniversary of the series. On this occasion, speakers from PwC Spain, Deloitte and EY participated. The webinar analyzed the evolution of the electricity market in the last five years and the prospects for the next five years, with a special focus on the main vectors of the energy transition, such as renewable energies, batteries, demand, green hydrogen and other renewable fuels. This content was presented in two complementary sessions. In the English session, statistical data were presented and in the Spanish session, an analysis table was held with the speakers.
Source: AleaSoft Energy Forecasting.
