German prices are still high, but they have fallen in France.

The cold weather boosted the prices of France's power contracts, which are based on prompt delivery, in wholesale trading Tuesday. Germany's prices, however, fell, but remained nearly twice as high as their French equivalents.

In recent days, low temperatures and a decline in wind power have increased electricity prices and caused them to be volatile. This is due to the weather-driven fluctuations in renewable output.

Naser Hashemi, LSEG analyst, said: "Market conditions are tight due to the high consumption in Central Western Europe (CWE) and low wind generation.

LSEG data shows that temperatures will fall between 0.4 and 1.5 degrees Celsius per day, causing a rise in consumption, especially in France where many homes are heated with electricity.

LSEG data shows that the French baseload day-ahead was 102.1 euros ($117.69 per megawatt hour) at 855 GMT, nearly 40% higher than its previous close.

The German equivalent of the position fell 5.3% to 196 Euro/MWh.

LSEG data indicated that on the supply side German wind power output was expected to drop by 1.3 gigawatts to 6.7 GW by Wednesday, while French wind production is forecast to fall from 5.6 GW down to 5.4 GW.

The German consumption of electricity is expected to drop by 200 MW on Wednesday to 65.5 GW, while the French usage is predicted to increase 1.5 GW for a total of 67.9 GW.

After the current cold spell, temperatures could increase by 3 to 3.5 degrees in average next week, compared to Tuesday. This would bring them back above their usual seasonal levels.

The German baseload for the year ahead was up 0.3% at 88 Euro/MWh.

The French position for the year ahead increased by 0.4%, trading at 50.5 Euros.

A German industry association has said that the demand for electric vehicles in Germany isn't as strong as official statistics would suggest. This is because dealers and manufacturers are increasingly'self-registering their cars', according to the group. Reporting by Vera Eckert and editing by Ronojoy Mazumdar.

(source: Reuters)