German spot prices fall on strong wind supply

German spot prices for Friday were lower than the French equivalent price, as wind production is expected to increase and demand is seen declining.

LSEG analyst Naser Hazemi stated that Germany's wind power production is increasing, and the solar industry has also increased. Lower demand, coupled with a higher supply, will reduce residual load. France, on the other hand, may become a net exporter, due to its bullish economic conditions.

By 0956 GMT, the German baseload day-ahead contract was down 65.2% to 27.40 Euros ($31.95). The French equivalent contract increased by 77.8% to 32 euros/MWh.

LSEG data revealed that German wind generation is expected to increase by 15 gigawatts, to 47.8 GW. French wind output is projected to drop 6 GW to 12.1 GW.

LSEG analysis shows that German wind energy supply will remain high at the start of next week. It is forecast to reach 40 GW Monday, 42 GW Tuesday, then drop to 33 GW Wednesday, and 23 GW Thursday.

European governments will have to face a number of time-consuming, expensive and difficult challenges in order to compete with China in the offshore wind industry. However, political pressures and national security issues may force the region into a decision.

LSEG data revealed that the power demand in Germany is expected to decline by 1.6 GW and reach 55.6 GW. In France, consumption will rise by 1.6 GW at 48.6 GW.

Analysts and Engie EnergyScan predict that temperatures will drop this weekend, before increasing again next week. This will keep heating demand low.

The French nuclear capacity has dropped by two percentage points, to 75%.

The German baseload for the year ahead was up 1.5% to 88.30 Euros/MWh. The French baseload for 2026 rose by 0.4%, to 56.80 Euro.

Benchmark European carbon permits increased 0.6%, to 78.91 Euros per metric ton.

(source: Reuters)