German forward contracts fall on lower carbon prices

German power contracts for the year ahead fell on Friday as a result of further drops in the carbon markets.

By?0949 GMT, German baseload for the year ahead had fallen 3.6% to 77 Euros ($91.33). The German forward curve?contracts also fell.

The French equivalent increased by 0.4%, to 50.20 Euro/MWh.

The benchmark carbon contract on the European market rose by 0.6%, to 73.01 euro per metric ton.

Analysts at Engie EnergyScan say that the forward markets are under pressure due to the sharp decline in carbon permits after German Chancellor Friedrich Merz made his comments. However, this was partly offset by higher gas prices.

The slight gains on the French side, however, showed both the buyers' interest in the sub-50 euro/MWh -level and the market's sentiment regarding the Multi-Annual Energy Planning?Law, they added.

The German and French baseload day-ahead contracts for Monday have not yet begun trading. On Monday, wind power was seen to be increasing sharply in the entire region, while demand is expected to decline.

LSEG data shows that German wind generation will increase by?6.4 GW to 25.5 GW Monday, while French output is expected to jump by 10.8 GW up to?17.9 GW.

The French nuclear capacity has increased by three percentage points to 90%.

LSEG analysis shows that the wind speed will drop to about 24?GW and?Wednesday, respectively, before spiking to more than 30 GW at the end of the week.

LSEG data revealed that power demand in Germany is expected to fall by 3.7 GW Monday to 58.8 GW while French demand will be down 560 Megawatts to 58.8 GW. ($1 = 0.8431 Euros) (Reporting and editing by Kim Coghill; Forrest Crellin)

(source: Reuters)