Solar PV, solar thermoelectric and wind energy production
Solar energy production increased in major European electricity markets in the week of Dec. 11 compared to the previous week. The increase ranged from 97% in Portugal to 5.3% in France. The exception was the Italian market, where solar energy production decreased by 0.1%.
AleaSoft Energy Forecasting's solar energy production forecasts indicate that production will increase in Germany, Italy and Spain during the week of Dec. 18.
In the week of December 11, wind energy production decreased in the major European electricity markets compared to the previous week. The French market experienced the largest decrease with 44%. The Iberian Peninsula and German markets saw decreases of around 1.0%. As with solar energy production, the Italian market was the exception as its energy production increased by 92% with an output of 817 GWh, the third-highest weekly production.
AleaSoft Energy Forecasting's wind energy production forecasts indicate an increase in production for the French and German markets for the week of Dec. 18, while a decrease is expected for the rest of the analyzed markets.
Electricity demand
During the week of Dec. 11, electricity demand decreased in most major European electricity markets compared to the previous week. The decline ranged from 6.7% in France to 2.3% in the Netherlands. The exceptions were the Spanish and Italian markets, where demand increased by 4.9% and 3.1% respectively. The recovery in demand was linked to the holidays of Dec. 6, Constitution Day in Spain, and Dec. 8, the Feast of the Immaculate Conception, celebrated in both countries.
The drop in demand was related to higher average temperatures compared to the previous week. Average temperature increases ranged from 4.7°C in Germany to 0.1°C in Portugal.
According to AleaSoft Energy Forecasting's demand forecasts for the week of Dec. 18, electricity demand will decrease in the markets of Italy, Great Britain, Belgium and the Netherlands. On the other hand, an increase is expected in the markets of France, Portugal, Spain and Germany.
European electricity markets
Prices in the major European electricity markets decreased during the week of Dec. 11 compared to the previous week. The exceptions were the MIBEL market in Portugal and Spain with increases of 4.7% and 4.5% respectively. The Nord Pool market in the Nordic countries registered the largest price decrease with 24%, while the IPEX market in Italy registered the smallest decrease with 11%. In the rest of the markets analyzed by AleaSoft Energy Forecasting, prices fell between 14% in the EPEX SPOT market in the Netherlands and 18% in the N2EX market in the UK.
During the second week of December, most of the European electricity markets analyzed had weekly averages below €90/MWh. The exception was the Italian market with an average of €110.14/MWh. In contrast, the Spanish and Portuguese markets registered the lowest weekly averages of €71.30/MWh and €71.32/MWh, respectively. In the other markets analyzed, prices ranged from €80.85/MWh in the market of the Nordic countries to €86.95/MWh in the British market.
On the other hand, the Nordic market registered the highest hourly price of the second week of December, €162.04/MWh, on Dec. 12, from 15:00 to 16:00. Throughout the week, prices on this market gradually decreased until reaching the lowest hourly price of €0.07/MWh on Dec. 17, from 4:00 to 5:00.
During the week of Dec. 11, the decrease in the average price of gas and CO2 emission rights and the decrease in electricity demand in most markets led to lower prices in most European electricity markets. Increased solar energy production in countries such as Germany and France also had a downward impact on prices.
AleaSoft Energy Forecasting's price forecasts indicate that prices could continue to fall in most major European electricity markets for the week of Dec. 18. Increased solar energy production in the Italian and German markets, along with increased wind energy production in Germany and France, could contribute to this behavior.
Brent, fuels and CO2
Brent oil futures for the Front-Month in the ICE market began Monday, Dec. 11, with a slight increase of 0.3% from the previous week's final session. However, on Tuesday, Dec. 12, these futures registered their weekly minimum settlement at $73.24/bbl. This price was the lowest for the Front-Month since late June. After Tuesday's decline, prices rebounded over the next two days, reaching a weekly high of $76.61/bbl on Thursday, Dec. 14. Nevertheless, on Friday, Dec. 15, prices fell 0.1% to $76.55/bbl.
Declining US crude oil inventories coupled with rising demand led to price increases in Brent oil futures during the second week of December. In addition, further production cuts agreed by OPEC+ also contributed to the price increases.
As for TTF gas futures in the ICE market for the Front-Month, they reached the maximum settlement price for the week of €36.12/MWh on Monday, Dec. 11. This price was 6.4% lower than the last session of the previous week. On Tuesday, Dec. 12, prices fell by 3.9% compared to the previous day to €34.70/MWh. Subsequently, on Dec. 13, they recovered by 3.2% to reach €35.81/MWh, only to fall again in the following sessions to register the weekly minimum settlement price of €33.19/MWh on Friday, Dec. 15. According to data analyzed by AleaSoft Energy Forecasting, this price was the lowest since the beginning of September.
In the second week of December, abundant supply and high European storage levels, as well as milder temperatures, led to further declines in TTF gas futures prices.
As for CO2 emission rights futures in the EEX market for the reference contract of December 2023, they experienced a decrease of 2.0% on Monday, Dec. 11, compared to the last session of the previous week. On Dec. 13, they reached their weekly maximum settlement price of €68.90/t, an increase of 1.0% compared to the previous day. In the days that followed, prices fell again to their weekly minimum settlement price of €66.35/t on Friday, Dec. 15. This was the lowest price for that year's December reference contract since October 2022.
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