Last week, solar energy production fell in most European markets compared to the previous week. However, some markets saw their highest daily records this year.
In Spain, the record for maximum instantaneous photovoltaic energy production was again broken, this time rising to 5,264 MW at 1.40pm on Saturday. Sunday saw a one-day, 2020 record 48 GWh of PV and solar thermal energy production.
All the European markets covered by AleaSoft topped the maximum daily solar energy generation levels seen thus far this year, with Germany generating 96 GWh.
That was not enough to reverse week-on-week solar energy production falls of 19% in Germany and 3.2% in France, however. For the fourth consecutive week, solar generation rose in Spain, this time 7.4%. Similarly, production in the Italian market rose for the fifth consecutive week – 4.3%.
Solar energy production values close to last week’s levels were expected this week.
Average temperatures rose last week, compared to the previous seven days. That caused a fall in electricity demand in several European markets. Belgium and France showed the greatest variation, with falls of 3.4% and 2.2% respectively. The declines registered in Spain, Italy and Great Britain were 0.4%, 1.1%, and 0.3%, respectively. A 1.6% increase was registered in Germany, however.
This week, AleaSoft forecasts indicate colder temperatures which will lead to increases in demand in several markets.
Last week the electricity prices of all the European markets analysed by AleaSoft were, on average, lower than in the previous week. The EPEX SPOT market of Germany stood out, with its weekly average price down 36% to sit around €10/MWh lower than in the previous week. The MIBEL market of Portugal had the least pronounced decline, with a difference of 1.4% between the average prices of the two weeks.
The drop in prices was mainly due to large renewable energy production last week but other factors included a decrease in demand and low gas prices.
The price of the EPEX SPOT market in Germany on Sunday was the most remarkable of the week. High wind energy production, higher temperatures and lower Sunday demand drove the first day in 2020 with a negative daily average price: ‑€8.27/MWh. A negative price was achieved in 23 of the 24 hours with the penultimate hour of the day notching €0.74/MWh. German has not seen negative prices on that market since December 8.
The IPEX market of Italy, the MIBEL market of Spain and Portugal and the N2EX market of Great Britain continued to form the group with the highest prices. These markets all had settlement prices on Monday above €30/MWh, with Italy hitting €40.65/MWh.
The EPEX SPOT markets of Germany, France, Belgium and the Netherlands were again at the opposite end of the scale. The prices for Monday ranged from €18.25/MWh on the German market to €25.08 in the Netherlands.
The Nord Pool market of the Nordic countries failed to reach €16/MWh during the week and on Monday sat at €10.23.
This week, the German market price is expected to recover until it approaches the prices of the rest of the markets in its group. AleaSoft expects prices to rise this week, in some cases close to those seen at the start of the month.
The prices of the main European electricity futures markets showed a slight recovery last week, even in markets which finished lower on Friday than seven days earlier.
The German EEX market rose 1.2% and Great Britain, in both the EEX and ICE markets, was again the region in which prices fell most. Last Tuesday it reached its lowest price of the year – €32.45/MWh on the EEX market. At the end of Friday, the price was 1.1% lower than seven days earlier.
Futures for next year, however, showed an upward trend. The most moderate rises were in Iberia. Both the EEX market of Spain and the OMIP exchange of Spain and Portugal registered 1.6% Friday to Friday increases. The rest of the markets registered higher increases, up to 6.7% on the ICE market of the Nordic countries where, having a lower price, the percentage value is more sensitive to change. That uptick amounted to €1.86/MWh.
The Brent oil futures for April on the ICE market last Monday settled at $53.27/bbl, the lowest level for more than 13 months. However, as of last Tuesday prices began an upward trend that continued for the rest of the week. On Friday, the settlement price was $57.32/bbl, 5.2% higher than seven days earlier and the highest this month.
These price increases occurred as Chinese refineries took advantage of low prices to buy and Libyan production fell due to tensions in the country.
Amid concerns about the effects of the coronavirus on demand, and taking into account non-OPEC-country production and reserve levels are high, the latest production cuts recommended by the OPEC technical committee may still be necessary to prevent excess supply lowering prices again. Further tension in Libya and instability in Iraq, however, could also muddy the waters.
The TTF gas futures price on the ICE market for March remained fairly stable last week, with settlement prices below €9/MWh. The settlement prices registered ranged from €8.56 last Tuesday to €8.89/MWh on Thursday. The Tuesday price, the lowest of the week, was also the lowest in two years.
The prices of TTF gas on the spot market last week also remained stable at around €9/MWh. The index price values varied from €8.81-9.12/MWh. Those were the lowest prices seen since the first half of October.
In the coming days, the gas prices were expected to remain low due to the high supply levels.
The API 2 coal futures on the ICE market for March began last week with a settlement price of $47.95/t, the lowest for two years. Last Tuesday, they started an upward trend that continued for the week. On Friday, the settlement price was $51.90, 5.7% higher than seven days previous and the highest this month.
The decline in national coal production in China due to coronavirus drove up imports, exerting an influence on prices. That trend could be maintained in the coming days due to transportation restrictions imposed by the Chinese government to try to control the outbreak. Such measures prevent the supply of coal from the country’s mining areas.
As for CO2 emission rights futures on the EEX market for the December reference contract, they started last week with a settlement price of €23.16/t, the lowest since October. However, as of Tuesday, prices rose until reaching a settlement of €24.40 on Thursday, the highest this month. On Friday, the price fell again, to €24.29. However, that price is still 4.1% higher than seven days earlier.
