Solar PV breaks records and together with wind energy drives down prices in European electricity markets


AleaSoft Energy Forecasting, April 11, 2022. During the first week of April, photovoltaic energy broke records in the Spanish, French and Italian markets. This technology and wind power have helped bring down prices in most European electricity markets. Negative values ​​or the lowest values ​​of recent months were recorded in several of them. Gas prices fell, also contributing to lower electricity market prices. Spanish power futures for the next quarter are up more than 30%.

Photovoltaic and solar thermal power generation and wind power generation

The week of April 4 ended with a general increase solar power generation compared to the previous week. In the case of Spain, the hourly rate photovoltaic energy production record was broken on April 7 at 2 p.m. with 11,313 MWh. Likewise, on April 10, the highest production in history was recorded in the French market, of 8788 MWh at 1:00 p.m., while the Italian market reached the highest production with this technology since July 2014, with 12,310 MWh at 12:00 p.m. the same day.

Over the week as a whole, the increase in production on the Italian market was 48% and on the French market 24%, compared to the previous week. In the German market, the increase in solar energy production was 11%, while in the Iberian Peninsula, where it includes photovoltaic and solar thermal energy, it was 7.0%.

For the week beginning April 11, the solar energy production forecast from AleaSoft Energy Forecasting indicates a reduction in the production of the Spanish and Italian markets, while on the contrary an increase in the production of Germany is expected.

Source: Prepared by AleaSoft Energy Forecast based on 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.

Similarly, during the first week of April, wind energy production increased in most markets analyzed by AleaSoft Energy Forecasting compared to the previous week. The biggest increase was recorded in Germany and it was 119%. On the French market, it also increased considerably, by 41%. In the case of the Iberian Peninsula, the increase was 4.8%, while in the Italian market production with this technology fell by 3.0%.

For the second week of April, forecasts from AleaSoft Energy Forecasting indicate a general reduction in production with this technology.

Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.

Electricity demand

The week of April 4 ended with a rise electricity demand between 1.5% and 4.2% compared to the previous week on the markets of France, Germany, Spain and Portugal. However, in the markets of Italy, Belgium, the Netherlands and Great Britain, demand fell, with the latter registering the largest drop, of 7.7%.

For the week of April 11, AleaSoft Energy Forecasting forecasts indicate a reduction in demand in all the markets analyzed in AleaSoft Energy Forecast in correspondence with the decrease in work at Easter, as well as less cold temperatures.

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 April 4, the prices of almost all the European electricity markets analyzed at AleaSoft Energy Forecast down from the previous week. The exception was the EPEX SPOT market France, with a price increase of 2.1%. In contrast, the largest price drop was in the German market, down 51%. On the contrary, the smallest drop was that of the IPEX market Italy, 3.7%. In the rest of the markets, price declines were between 6.7% of MIBEL market of Spain and Portugal and 37% of North Pool Market of the Nordic countries.

During the first week of April, average prices were below €295/MWh in all analyzed electricity markets, although in almost all cases they exceeded €160/MWh. The exceptions were the German market and the Nord Pool market with weekly averages of €101.31/MWh and €103.93/MWh, respectively. On the other hand, the highest average is that of the French market, which reaches a value of €294.47/MWh, followed by that of the Italian market, of €267.09/MWh. On the rest of the markets, prices were between €164.17/MWh on the Belgian market and €234.16/MWh on the N2EX market from the United Kingdom.

Regarding hourly prices, on April 4, from 8:00 a.m. to 9:00 a.m., a price of €2,987.78/MWh was reached in France, the highest since October 2009. This price was favored by low temperatures and the fact that a significant part of French nuclear reactors were not in operation.

On the other hand, on Saturday 9 April, in the afternoon, negative hourly prices were reached on the markets of Germany, Belgium and the Netherlands. In the case of the Belgian market, there was also an hour with a negative price on Thursday 7 April.

In the other markets, there were no negative hourly prices, but the lowest values ​​in recent months were reached on Sunday afternoon, April 10. In Italy, the minimum price of €22.42/MWh was the lowest since May 2021. In Spain and Portugal, a minimum hourly price of €1.03/MWh was reached, the lowest price since August 2021. On the French market and on the Nord Pool market, the lowest prices since February 2022 were recorded.

During the week of April 4, the increase in wind and solar energy production in most markets helped lower prices in European electricity markets. In addition, although gas prices remain high, during the week under analysis they recorded a drop which also contributed to the drop in prices in the electricity markets.

Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.

Electricity Futures Contracts

The first week of April ended with a drop in power futures settlement prices for the third quarter of the year in most markets. The exceptions were the Nordic region and the Iberian region. Both in the ECI market and the NASDAQ market Nordic countries, increases of 10% were recorded. However, the EEX market of Spain and OMIP market Spain and Portugal led the price increases for this product. They recorded increases of more than 30%. Specifically, in the EEX market of Spain, the settlement price increased by €51.25/MWh between the sessions of April 1 and 8, being the market with the highest price increase during this period. In the rest of the markets, prices fell between 3% and 6% between these sessions.

For their part, the futures prices of electricity for the next year 2023 recorded a general increase in all the markets analyzed at AleaSoft Energy Forecast. The increases range from 2.5% of the Spain EEX market to 9.5% of the UK EEX market.

Brent, fuels and CO2

Brent oil futures for the month of the front in the ECI market during the first week of April recorded lower settlement prices than on the same days of the previous week. The week’s maximum settlement price of $107.53/bbl was reached on Monday, April 4, and was 4.4% lower than the previous Monday. While on Thursday, April 7, the weekly minimum settlement price of $100.58/bbl was recorded, 6.8% lower than the previous Thursday.

Concerns about demand due to rising coronavirus cases and lockdowns in China aided the downward trend in Brent oil futures prices in the first week of April. In addition, the announcement of the quantities of oil to be released from the strategic reserves of the member countries of the International Energy Agency with the aim of reducing the tension caused by the Russian invasion of Ukraine on the market also contributed to lower prices.

As for Gas TTF futures in the ICE market for the first month, in the first week of April, they maintained a downward trend. On Monday April 4, they recorded a settlement price of €109.52/MWh, 6.8% higher than the previous Monday, but already 2.3% lower than the last session of the previous week. As a result of the decreases recorded during the week, on Friday April 8, the settlement price was €103.88/MWh. This price was 7.4% lower than the previous Friday.

Regarding CO2 emission rights future in the EEX market for the December 2022 reference contract, settlement prices had values ​​around €78.75/t in the first week of April. Uncertainty about the effects of the war in Ukraine on the economy and demand kept the prices of these futures contracts at values ​​similar to those of the previous weeks. On Wednesday April 6, the weekly minimum settlement price of €77.18/t was recorded, 1.4% lower than the previous Wednesday. But during the last days of the week, prices recovered and the maximum weekly settlement price of €80.09/t was reached on Friday 8 April. This price was 2.0% higher than the previous Friday, but €1.61/t lower than the maximum settlement price of the previous week, which corresponded to Tuesday 29 March.

Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.

Analysis by AleaSoft Energy Forecasting on the outlook for energy markets in Europe and the financing of renewable energy projects

AleaGreenthe AleaSoft Energy Forecastof the division specializing in long-term price curve forecast reports for European markets, offers the reports corresponding to the second quarter with a special promotion. The forecasts have hourly granularity over the entire forecast horizon, they incorporate the confidence bands corresponding to the P15 and P85 percentiles and the prizes captured by solar photovoltaic and wind power.

Those interested in energy storage and hybridizationthe main challenges of energetic transitionhave the opportunity to explore them further in the next AleaSoft Energy Forecastthe webinar of “Prospects for energy markets in Europe. Vision of the future: energy storagewhich will take place on April 21. The webinar will also analyze the evolution of European energy markets in recent weeks.

Courtesy of AleaSoft Energy Forecast.


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