Lower temperatures lift power demand

The upcoming days are likely to see low temperatures in Europe. This will cause the German spot price on Tuesday to be slightly higher. However, the French contract remains low due the strong supply of nuclear and wind energy.

As of 0951 GMT on Tuesday, the German baseload electricity price was 109.50 Euros per megawatt-hour. This is an increase of 0.5% over Friday's close.

LSEG data revealed that the equivalent French contract was 14.75 euros/MWh. Friday, the Monday contract was not traded.

LSEG analyst Xiulan He said that the wind supply in Germany is decreasing, and this is only partially offset with the growth in solar power. This results in a higher residual load, and a negative signal for Germany.

LSEG data shows that German wind power production is expected to decline by 6.2 gigawatts on Tuesday to 12.2 GW while French output is projected to fall 1.8 GW at 7.9 GW.

LSEG data shows that wind power will rebound on Wednesday to around 26 GW, then rise to 32 GW on Thursday before dropping to 22 GW by Friday.

The French nuclear capacity remained unchanged at 79%.

On Tuesday, power consumption in Germany will rise by 1.8 GW (to 54.6 GW) as temperatures fall to an average of 12.3C. In France, demand is expected to increase by 2.5 GW (to 46.2 GW) as temperatures are forecast to drop to an average of 16.8C.

Analysts at Engie Energy Scan say temperatures are around 2 degrees Celsius lower than normal this week, leading to the first heating degree day of the season.

LSEG data revealed that the German baseload electricity for the year ahead fell 0.4%, to 87.20 Euros/MWh. The French equivalent dropped 1% to 58.45 Euros.

The benchmark contract on the European carbon markets fell 1.6%, to 76.30 Euros per metric ton. (Reporting and editing by Louise Heavens; Forrest Crellin)

(source: Reuters)