More Supply, Less Demand Cut Spot Prices

Lower demand and higher solar supply in the European prompt power market curbed spot prices on Tuesday, offsetting the impact of lower wind levels and thermal power plant outages, traders said.

The German baseload power contract for delivery on Wednesday shed 2 euros on the day to 32 euros ($43.1) per MWh.

The equivalent French contract was 25 cents euros lower, at 29.25 euros/MWh.

German power demand was expected to fall by 200 megawatts to 59.1 gigawatts (GW) on Wednesday, according to Thomson Reuters Point Carbon.

German solar power was seen rising by 1.5 GW on the day to 7.9 GW on Wednesday, according to the data, while wind power was expected to fall to 4.7 GW on Wednesday from just over 5 GW a day earlier.

German utility E.ON showed on its transparency site that some capacity will be offline at its coal-fired plants in the near term - at Veltheim 3 and Schkopau B units until Wednesday. Half of the Wilhelmshaven plant's capacity is due offline on Wednesday, and some at Heyden later in the week.

EnBW also showed some anticipated capacity losses at its Karlsruhe block 8 coal plant on Tuesday, and again on Thursday.

Weather reports said the current low pressure front in the region will make way for a return of summery weather in the second half of the week, which in France would drive temperatures higher and in Germany see them fall slightly, albeit from high levels.

Power curve prices posted new 2-1/2 month highs on firm oil and carbon prices and as coal prices also turned higher after an initially weaker start to the day's session.

German baseload power for the year ahead, calendar year 2015 , was 35 cents up from Monday at 35.20 euros/MWh, the highest level since April 29.

The same contract for French power delivery in 2015 was untraded at a bid-ask midpoint of 41.9 euros per MWh.

Oil rose above $108 a barrel, boosted by escalating political tensions over Ukraine and fighting in Gaza, while U.S. prices were supported by expectations of a drop in national stockpiles.

EU carbon prices continued firmer on expectations for tight permit supplies in the near term. Dec ' 14 was more than 1 percent higher at 6.15 euros/tonne.

Traded API 2 North Europe delivery coal was last at $78.5 a tonne, 30 cents above the previous API 2 index closing level.

($1 = 0.7418 Euros)

(Reporting by Vera Eckert; Editing by Erica Billingham)