Increased Renewables Drive Spot Prices Lower

Central European day ahead power fell on Monday due to forecasts for rising renewable generation as the Hungarian spot spread narrowed on higher import capacity, traders said.

Czech electricity for Tuesday fell 40 cents to 36.25 euros ($46.89) per megawatt hour and Hungarian day ahead declined 1.50 euros to 41 euros in over-the-counter trade.

Hungarian prices have traded at a regional premium due in part to reduced cross border capacity from Slovakia through Sept. 21 but traders said the premium was narrowing on more import capacity from Austria.

"The situation is changing a little bit because there is now more capacity from Austria to Hungary and Slovenia," one trader in the region said.

Forecasts for increased renewable production was the main driver pressuring spot prices. Data from Thomson Reuters Point Carbon showed forecasts for wind generation in Germany rising 500 megawatts to 3.2 gigawatts on Tuesday with solar output more than doubling to 5.6 GW.

Further along the curve, the Czech Cal '15 contract fell 30 cents to 34.30 euros and the Hungarian front year dipped 25 cents to 43.35 euros on the Prague-based Power Exchange Central Europe.

Around the region, the benchmark German Cal '15 contract declined 29 cents to 35.01 euros on Germany's EEX exchange in afternoon trade.

Poland's utilities will have about 4.4 gigawatts of power offline for planned maintenance on Wednesday, data from grid operator PSE showed. Day ahead on Poland's POLPX rose to 210.28 zlotys ($64.83) from 202.55 zlotys.

Russian natural gas deliveries entering Slovakia from Ukraine have fallen by about 17 percent since the weekend compared to levels in previous days, representing the lowest volumes since at least 2011, data from Slovak pipeline operator Eustream showed.

Brent crude oil fell below $97 per barrel to its lowest in more than two years as lacklustre economic data from China, the world's top energy consumer, cast a shadow over the outlook for oil demand at a time of abundant supply.

European Union carbon futures declined 1 cent to 5.96 euros a tonne in afternoon trading.

(1 US dollar = 0.7730 euro) (1 US dollar = 3.2434 Polish zloty)

(Reporting by Michael Kahn; Editing by Michael Urquhart)