Demand rises outweighs gains in renewable energy

European spot power prices dropped on Monday as wind and solar energy production is expected to outweigh the growing demand in the region.

By 0952 GMT on Tuesday, the German baseload electricity price was 87.50 Euros per megawatt-hour (MWh), down 21.2% compared to Friday's price for Monday delivery.

LSEG data revealed that the equivalent French contract was 62 euros/MWh. Data showed that the French Monday contract had not been traded on Friday.

Naser Hashemi, LSEG analyst, says that Germany's residual load is expected to be lower due to a stronger renewable energy supply. Imports are also expected.

The German wind energy output is expected to double on Tuesday, from 5.8 gigawatts to 10.4 GW. Meanwhile, the French output will increase by 2.5 GW to 4.6 GW.

The data revealed that the German solar power supply is expected to increase by 2.9 GW up to 13 GW.

LSEG data shows that power from German solar panels will continue to grow steadily, reaching around 15 GW by Thursday, before falling back to 14 GW by Friday.

The French nuclear capacity remained unchanged at 67%.

The data shows that power consumption in Germany is expected to increase by 1.8 GW Tuesday, to 53.5 GW. In France, demand is projected to increase by 2 GW by 40.1 GW.

The German power price for the year ahead was 0.2% higher at 100.40 Euros/MWh, while its French counterpart, Cal '25', was 1.1% higher at 85.45 Euros/MWh.

The price of European CO2 permits for December 2024 expired was up by 1.1%, at 73.35 Euros per metric ton.

Anders Nordeng, Veyt analyst, said that the return of three French nuclear power plants and the prospect for strong solar and wind generation are all somewhat bearish on gas and carbon.

He added that the impact of the fuel switch should be mitigated by the reversal of the trend. The rise in gas prices has made coal-fired power more affordable than gas. (Reporting and editing by Emelia Sithole Matarise; Forrest Crellin)

(source: Reuters)