Winter Weather, Low Renewables Drive Spot Higher

Forecasts for colder weather and a steep fall in renewable supplies in the region sent central European spot prices to multi-week highs on Monday, traders said.

On regional exchanges Czech power for Tuesday shot 31 percent higher to 52.60 euros ($65.70) per megawatt hour, Slovak and Hungarian day ahead climbed 28 percent to 52.60 euros, and Romanian prompt ticked 14 percent higher to 46.97 euros.

Temperatures in central Europe were forecast to hover around freezing, driving up heating demand, while data from Thomson Reuters Point Carbon showed forecasts for wind generation in Germany sinking to 3.1 gigawatts for Tuesday from 12.4 gigawatts.

"It looks like winter is finally coming and there are virtually no renewables for tomorrow," one trader said. "Those are the drivers."

For Romania, less impacted by German renewables than the Czech Republic, Slovakia and Hungary, wind generation was forecast to rise by 700 megawatts to 2.1 gigawatts and offset the impact of colder temperatures.

Further along the curve, Czech power for 2015 delivery rose 15 cents to 35.15 euros and the Hungarian Cal '15 held steady at 43.05 euros. The benchmark German Cal '15 contract rose 7 cents to 35.55 euros in afternoon trade on Germany's EEX exchange.

A 348.5 megawatt unit at Serbia's Kostolac B coal-fired power plant will remain offline until Dec. 20, the plant's spokesman said.

The Coordinated Auction Office (CAO) overseeing Southeast Europe's cross-border power capacity has completed the first auction of front-year power capacity in which three regional countries and 23 firms took part.

Bosnia's largest engineering group, Energoinvest, has signed a 29 million euro deal ($36 million) to build a 400 kV power transmission line in neighbouring Montenegro. [ID: nL6N0TL2LU]

Day ahead on Poland's POLPX exchange rose to 190.44 zlotys ($56.91) from 167.33 zlotys as bourse data showed power plant outages expected to remain steady on Tuesday at about 4.8 gigawatts.

Brent crude oil fell to a five-year low below $68 before recovering most of the losses as investors looked for a price floor after last week's OPEC decision not to cut production.

European Union carbon futures edged one cent higher to 7.05 euros a tonne in afternoon trading.

Reporting by Michael Kahn; Editing by Michael Urquhart