Russia Sanctions Concerns Lift Curve Prices

• German Cal '15 posts new 4 1/2-month high
• Firm gas, carbon, coal forwards interact with power
• Spot mixed, Germany up on calm, more overcast weather

The possibility of a Russian backlash to any further economic sanctions from the European Union lifted power forward prices on Monday, with the German benchmark position reaching a new 4-1/2 month high.

The EU reached an outline agreement on sanctions last Friday in the wake of the downing of a Malaysian airliner over eastern Ukraine which is held by Russian-backed separatists. Details of possible steps are expected in the next few days.

"Operators are responding to the possible danger of Russian retaliation in the form of withheld energy exports, thinking better safe now than sorry later," one trader said.

"The price increases in gas and coal, which result from similar reasons, have also interacted with the electricity curve," he added.

German baseload power for the year ahead, calendar year 2015 , was up 20 cents up from Friday at 35.85 euros ($48.2) per megawatt hour (MWh), its highest level since March 12.

The contract has risen 2.7 percent since July 17, the day of the Malaysian plane incident.

The less liquid contract for French power delivery in 2015 was down 25 cents at 42.25 euros per MWh.

Carbon permits and gas prices were higher, supporting power, as generators have to factor costs in the other markets into electricity prices calculations.

Coal for delivery in north Europe traded sideways after a weaker start, with traders citing the as yet remote chance that Russian coal imports could become subject to sanctions.

Spot power prices were split in the two main markets, with Germany's Tuesday price higher and that in France lower.

Traders said German renewable supply would take a hit from lower wind and overcast weather, which would curb solar supply.

This tighter picture would overrule higher thermal plant availability and was therefore price-supportive, traders said.

The German baseload power contract for delivery on Tuesday traded at 35.8 euros/MWh, 90 cents above what was paid for Friday.

The price of baseload power delivery on Tuesday in France was down 7.50 euros at 20.5 euros due to weak demand and lower temperatures in a local power market that is very exposed to higher or lower air conditioning use, traders said.

($1 = 0.7443 Euros)

(Reporting by Vera Eckert; editing by Jason Neely)