The rising renewable generation has an impact on spot prices
The European spot electricity prices dropped on Monday, as German wind and Solar power supplies are expected to increase on Tuesday.
By 0938 GMT on Tuesday, the German baseload electricity price was 86.75 Euros per megawatt-hour (MWh), down 16.2% compared to Friday's price for Monday delivery.
LSEG data revealed that the equivalent French contract was 24.50 Euros/MWh. On Friday, the Monday price was not traded.
Riccardo Paraviero, LSEG analyst, said: "The outlook for Tuesday is characterized by surges in solar power production that will reach levels above normal - and they should stay at such levels throughout the remainder of this week."
LSEG data indicated that the German wind output is expected to increase by 2.2 gigawatts to 17.6 GW on Tuesday, while French output will rise by 5.7 GW (to 10.6 GW), according to the data.
The data revealed that the German solar power supply is expected to double in size, from 5.5 GW up to 9.8GW.
The French nuclear capacity has increased by one percentage point, to 75%.
The data revealed that the German power consumption on Tuesday is expected to rise by up to 1.6 GW (to 55.5 GW) while French demand will increase by 800 Megawatts (MW), to 43.2 GW.
Emmanuel Dubois Pelerin, credit analyst at S&P Global Ratings, said that temporary oversupply and grid congested are causing a rise in the number hours where power prices are negatively impacted. This highlights a growing demand for flexible low carbon generation and battery storage.
He said that to reduce congestion, the annual capital spending on Europe's electricity grids should be increased to more than 100 billion euros.
German power for the year ahead was down by 2.1% to 84.30 Euros/MWh. This is a new low. Cal '25 in France fell by 3.1%, to 68.80 Euros/MWh. This is the lowest since June 25.
The European CO2 allowances expiring in December 2024 have fallen 1%, to 64.35 Euros per metric ton.
Ingvild Sorhus, Veyt's analyst, said that with the high level of solar renewable energy generation during this week there was less space for emissions-intensive power production. This in turn would reduce demand for carbon allowances. (Reporting and editing by Janane Vekatraman; Forrest Crellin)
(source: Reuters)
