Signals of bearishness are triggered when price trends diverge.
On Wednesday, the direction of spot electricity prices in Germany and France diverged. However, the dominant trends of increasing renewable output and declining demand created a bearish wholesale environment.
In Germany, the demand for electricity is down by 1.7 Gigawatt Hours per Hour (GWh/h), but wind and solar power generation are both up by 7.3 GWh/h & 0.9 GWh/h respectively. This results in a reduction of almost 10 GWh/h in residual load, according to LSEG analyst Naser Hachemi in a forecast.
The residual load is the amount of power that conventional power plants must produce after taking into account renewable energy production.
The German baseload for the day ahead was down by 24.3% to 101.7 euros ($110.20), a correction from earlier this week's four-month-high.
The French baseload rate for delivery on Thursday rose 13.2% to 90 euros/MWh. However, the discount to Germany remained.
The German wind output will double from 7.7 gigawatts to 15.7 GW per day. France will lose 800 MW, bringing it down to 2.4 GW. Solar power in both countries combined is expected to gain 800 MW.
The French nuclear capacity remained unchanged at 78%.
On Thursday, power consumption in Germany is expected to drop by 1.7 GW and reach 56.1 GW. In France, demand will fall by 2.6 GW and reach 45.8 GW.
The German power contract for the year ahead was down by 0.9% to 89.8 Euros/MWh. Meanwhile, the French baseload contract for 2025 was not traded after it closed at 73.3 Euros/MWh.
The European CO2 allowances in December 2024 fell by 1.3% to 66.38 Euros per metric tonne.
AGEB, a group that collects statistics on the industry, has predicted that German primary energy consumption will fall by 1.7% in 2024 to 356.7 millions tonnes of hard coal unit. This is equivalent to 2.9 billion kilowatt-hours (kWh).
This is almost 30% lower than the highest level achieved in 1990.
AGEB cited a decline in usage due to the slowing of the economy. It said that CO2 emissions were likely to fall by 3,3% this year. (1 dollar = 0.9228 euro) (Reporting and editing by David Evans, Vera Eckert)
(source: Reuters)
