Spot Prices Fall as Supply Recovers, Demand Stalls
Forecasts for relatively comfortable levels of renewable power production in the coming week curbed European prompt power prices on Friday as the market also took account of weak demand.
"We will be closing a supply gap, also in thermal capacity, while consumption will be limited medium-term in a week shortened by a holiday," one trader said.
The German baseload power contract for Monday delivery was at 36 euros ($49.2) per megawatt-hour, down 3.55 euros from what had been paid for Friday.
The equivalent French contract was down 1.75 euros at 35.50 euros per MWh.
German solar output will range between 5 and 7 gigawatts (GW) each day and wind mainly between 4 and 5 GW throughout next week, according to Thomson Reuters Point Carbon.
German and Austrian power plant capacity is likely to rise 3 percent by May 30, data from the European Energy Exchange showed, with gains in lignite, gas and hydro availability overriding a decrease in hard coal-fired capacity.
French nuclear power availability is at about 76 percent.
In German nuclear news, E.ON has signalled it does not expect a lengthening of its outage at the Grohnde reactor beyond the indicated June 20. There had been trader talk that additional findings in a security probe at the plant might cause delays.
A shortfall in German nuclear arising from various load drops will end at the weekend, while overall availability remains down by one third in the maintenance season.
On the demand side, Germany will be weak with around 61 GW per day early next week when the weekly average will be only 54 GW, owing to the May 29 public holiday, Point Carbon data showed. French demand will be around 49 GW each day on Monday/Tuesday and around 45 GW for the weekly average.
Temperatures will be falling next week by two degrees Celsius in Germany on a 24-hour daily basis from the level on Friday while those in France will be stable, albeit lagging Germany's by 2-3 degrees.
Along the forward power curve, benchmark positions were a tad higher although most fuel prices weakened.
The Cal '15 baseload contract for next-year delivery in Germany rose 10 cents to 34.55 euros and the equivalent French contract was 5 cents up at 41.95 euros.
Prices of EU carbon, north Europe coal and gas declined while Brent crude held steady above $110, supported by the crises in Ukraine and Libya and positive U.S. economic data.
In utilities news, a German newspaper said nuclear companies planned jointly to create a publicly backed entity to help share the multi-billion-euro costs of decommissioning their nuclear plants. The report boosted share prices.
While the companies denied knowledge of such a plan, traders said the choice of a well-known industry expert as a mediator, if confirmed, would be beneficial for the operators' cause.
($1 = 0.7323 Euros)
(Reporting by Vera Eckert; Editing by Dale Hudson)
