Prices spike on demand and supply decreases

The European power price rose sharply on Tuesday, thanks to a combination of lower forecasts for wind and solar energy generation and higher consumption as temperatures in the region declined. Demand is slightly higher. In a research note on the day ahead, LSEG said that wind supply was dropping. It also added that thermal power was more available.

LSEG data shows that the French baseload day-ahead traded at 91 Euros ($105.68 per megawatt hour) at 855 GMT, a 13% increase over the previous close.

After a close of 120.5 euros/MWh, the equivalent German position had a price of 169.8 Euros/MWh.

LSEG data shows that German wind output is expected Wednesday to fall 16.1 gigawatts to 7.7 GW while French wind production is projected to decrease 4.8 GW and reach 4.6 GW.

The French nuclear energy availability remained unchanged at 86% total capacity.

The German power consumption is expected to increase by 200 MW per day to reach 64.2 GW, while the French usage is predicted to grow by 600 MW on Wednesday to reach 63.9 GW.

The temperatures should drop by 0.6-1.1 degrees Celsius per day, but should rise next week.

The German baseload for the year ahead was down by 0.8% to 85.7 Euro/MWh.

The French position for the year ahead was not traded, after previously settling at 48.6 Euros/MWh.

The benchmark contract for 2025 on the European carbon market fell 0.6% to 82.12 Euros per metric tonne.

Veyt, a market intelligence company, said that the weather sends mixed signals for carbon. "The lower wind levels and the milder temperatures in Germany offset each other's impact," the firm stated. Verivox, using distributor data, reported that retail power prices for German consumers who are locked into basic local tariffs would drop by 2.6% as of January 1.

A family that uses 4,000 kilowatt-hours per year will pay in average 1,717 Euros for their annual electricity bill.

(source: Reuters)