Power prices rise due to higher carbon costs and fuel costs
The European power price curve rose on Tuesday as a result of higher carbon contract prices and firmer gas prices.
Analysts at Engie EnergyScan stated that the effects of the price increase were most noticeable in the German front-month baseload contract.
The contract for German baseload power at the month-ahead level was up 2.7% at Euros per megawatt at 1002 GMT on Tuesday, and 10.2% over the past week.
Early trade in Europe's benchmark contract for gas?touched its highest level in 10 weeks, continuing the bullish trend from the previous session?amid forecasts that demand would increase, short-covering and geopolitical tensions regarding Iran.
LSEG data shows that German day-ahead electricity?was up 7.4% at 119.25 Euro/MWh while the equivalent French contract was 14% higher at 107 Euro/MWh.
LSEG data revealed that the wind power output in Germany will?rise by 1 gigawatt on Wednesday to 23.6 GW. In France, it is expected to drop by 4 GW to 6.7 GW.
The data revealed that the German solar energy generation will drop by 260 megawatts, to 2.1 GW.
LSEG data shows that German electricity consumption will drop by?410 MW on Wednesday to 66.4 GW. In France, demand is expected to fall by 450 MW, to 63.9 GW.
The French nuclear capacity has fallen by two percentage points, to 85%.
The German baseload contract for the year ahead rose by 0.8%, closing at 85.75 Euros/MWh. Meanwhile, the French contract for front-year was not traded after it closed at 50.30 Euros/MWh.
The benchmark 2025 carbon contract on the European?market was down 0.7% to 90.70 euros per metric tonne, after reaching its highest level since July 2023 last week.
Henry Lush, Veyt's analyst, said that a lower heating demand would limit the potential upside of the carbon contract. However, significant changes in the weather forecast are likely to be the price drivers, he added. Reporting by Forrest Créllin. Mark Potter (Editing)
(source: Reuters)
