Prices of prompts spike as demand increases in hot weather
The European wholesale electricity prices rose sharply Tuesday as hotter weather is expected to increase demand for air conditioners, while German wind energy output dropped sharply.
LSEG analyst Riccardo Paraviero highlighted the impact of a lower German wind energy supply at night. He said that this would lead to an increase in the use of gas-fired electricity.
By 8am GMT, the French contract for baseload power was up by 34.5% to 74 euros ($85.76). The German contract rose 73.7% at 76 euros/MWh.
LSEG data indicated that the German wind power production was expected to drop by a third consecutive day. It would reach 20.6 gigawatts on Wednesday.
The French nuclear capacity remained at 67%.
EDF, the operator of the Saint Alban nuclear power plant in eastern France, said that high water temperatures along the Rhone River are expected to have an impact on electricity production from July 1.
The power consumption in Germany will rise by 2.4 GW per day, reaching 55.4 GW by Wednesday. In France, the demand is expected to increase by 1.1 GW at 48.1 GW.
LSEG's projections show that temperatures are expected to increase by 2 to 3 degrees Celsius and will likely remain at these levels in average for the next week.
The German baseload power for the year ahead was down by 4.2% to 88.8 Euro/MWh, while its French equivalent fell by 4.3% to 64.9 Euro.
The benchmark contract on the European carbon markets increased by 0.7%, to 73.77 Euros per metric ton.
Analysts at Norwegian carbon consultancy Veyt stated in a research report that the market could oscillate around two options expiry dates between 70 and $75 euros until midweek.
Batteries output and trade in Germany fell sharply in 2024 due to a slowdown in demand for electric vehicles and the competition from Asian manufacturers. Reporting by Vera Eckert, Editing by David Goodman.
(source: Reuters)
