Watch out for firms that are reducing their renewable energy output due to the hot weather
The European power prices for the day ahead rose on Wednesday, as forecasts of lower renewable production in Germany's main market coincided with rising temperatures that pushed up local demand.
We expect a bullish outlook for Germany. "Both wind and solar supplies are decreasing", said LSEG Analyst Xiulan She.
The French contract for baseload electricity on Thursday rose 4.3% to 97.0 euros ($113.49 per megawatt-hour) at 0710 GMT. Meanwhile, the German equivalent contract increased 18.4% to 111.3 euros/MWh.
The French nuclear capacity has increased by two percentage points, to 69%.
Due to the higher temperatures of water used in water systems, a heatwave caused capacity losses at several reactors. France depends on these for 70% of its energy consumption.
According to LSEG, the German wind power generation is expected to drop to 4.5 gigawatts per day from 9.1 GW and German solar production will probably fall to 17.6 GW compared to 18.5 GW.
In Germany, the demand was expected to increase by 800 MW per day to reach 53.5 GW. However, in France it is predicted to drop by 2.1 GW and fall to 44.1 GW.
After a settlement at 85.5 Euros/MWh, the German baseload contract for the year ahead was not traded. The French counterpart also has not traded yet after a close at 61.4 Euros.
Trayport, a trading platform, released a quarterly report that stated that, between April and the end of June 2025, European gas traded over-the counter and at major hubs and bourses was up by 53% on an annual basis. The price of electricity was up 36%. That of coal was up 6%. And that of emissions, it increased 11%.
Trayport has cited the heatwaves in June as a reason for an increase in power demand. This trend was also seen on other markets.
The German solar industry warns against the proposed end to subsidies for new rooftop photovoltaic system, which was suggested by the Economy Minister.
E.ON, the German energy network operator, who reported its half-year results on Wednesday, urged the energy regulator to increase future returns on grid investment.
(source: Reuters)
