Increased usage and lower German wind supply prompts a warning

The European wholesale electricity prices rose on Monday on lower German wind generation forecasts and increased demand for the day ahead.

LSEG's research also indicated a lower wind speed in the Benelux area, adding some lignite and nucleus availability under generally neutral conditions.

At 0735 GMT, the German baseload electricity for Wednesday was up 4.7% at 94.5 Euros ($111.09 per megawatt-hour (MWH).

The French equivalent contract was not traded, but the bid-ask price range for it was 57-60 Euros after the close of 42 euros/MWh.

LSEG's research shows that the wind power output in Germany is likely to fall from 15.8 GW per day to 12.6 GW.

The heatwave in Europe has now ended after record-breaking temperatures over the last fortnight triggered intraday peak power demand for air conditioners, resulting in subsequent price increases.

Frankfurt utility Mainova, for example, said that on July 2 a peak demand of 850MW was recorded. This is the highest level ever after 800MW in recent times. Temperatures reached 38.4 degrees Celsius.

BNP Paribas stated in a recent note that a new spell of low winds and risks for French nuclear power generation was posing renewed downside risks.

The French nuclear capacity remained at 83%.

In Germany, demand is expected to increase 700 MW to 53.5 GW. In France, it will remain largely unchanged at 44.2 GW despite temperatures rising by 1.4 degrees.

The German baseload contract for the year ahead was down by 0.4% to 86.7 euros/MWh, while the French equivalent remained virtually unchanged at 62.7 Euro.

The benchmark contract on the European carbon markets fell 0.4%, to 70.93 Euros per metric ton.

Fraunhofer ISE's data revealed that, in Germany, the low wind power mix in the first six months of this year lowered the renewable energy share to 60.9%, down from 65.1% a few years earlier. Solar's share also increased significantly.

(source: Reuters)