German forward contracts increase on more expensive gas and carbon
German power contracts for the year ahead traded higher on Friday. They followed gains in carbon permits and gas contracts, which were attributed to lower temperatures predicted for a week-ahead.
German baseload for the year ahead rose 0.7%, to 87.24 Euro ($102.40), per megawatt-hour at 0905 GMT. This was due to higher gas contracts and permits. The French equivalent fell 0.6% to 52.35 euros/MWh.
The benchmark carbon contract on the European market rose by 0.6%, to 88.99 Euros per metric ton.
Analysts at Engie EnergyScan say that the residual load will increase next week due to low renewable output rather than cold temperatures, which should support carbon allowances.
They added that a possible disruption of U.S. gas flows next week due to the cold temperatures may also affect carbon allowances and power forward curve prices.
LSEG data show that the German and French day-ahead contracts for baseload power,?for Sunday, had not yet started trading. LSEG analyst Xiulan he cited a bullish forecast on lower wind supplies and?more demand.
LSEG data shows that the German wind energy generation will?fall 11.3 gigawatts on Monday to 13.8 GW while French output is expected to drop by 8.1 GW and 4.5 GW.
LSEG analysis shows that wind speeds are expected to increase on Tuesday and/or Wednesday, to approximately 20 GW or 22 GW respectively, before reducing slightly by the end of 'the week.
LSEG data indicated that power demand in Germany was expected to increase by 930 Megawatts to 67 GW Monday. In France, it was up?by 1,5 GW to 65.5 GW.
LSEG data shows that temperatures are expected to drop throughout the weekend and remain below Friday's temperatures on Monday.
On Friday, the French government will vote on a motion of no confidence after Prime Minister Sebastien Lecornu announced that he would pass the budget by decree rather than by vote.
The French energy sector could be affected by a 'vote of confidence' as the long-delayed law on energy planning that codifies EDF’s reactor development program and sets out the framework for renewable energies would further be delayed.
(source: Reuters)
