The price of the MIBEL electricity market in Spain and Portugal continued to fall last week after registering a 10% decrease in the previous week.
From Monday to Thursday, the average price was €40.90/MWh for a week-on-week decrease of 5.4%. AleaSoft says the increase in wind energy production – to the detriment of coal-fired and combined cycle electricity – favored the fall in prices. From Monday to Wednesday, wind energy production in mainland Spain rose 44% on a weekly comparison. Coal-fired energy production fell 44% and combined cycle output 1.8%. Another factor that led to the decline in Iberian prices was the price of the French market on the EPEX SPOT, which last week was the lowest in Europe.
European electricity markets
In the group of European markets with the highest prices, the MIBEL and the N2EX market of Great Britain had prices around €40/MWh last week. In the British market, the average price fell 10% on a weekly basis. The IPEX market of Italy had the continent’s highest electricity price at around €46/MWh. On Tuesday and Wednesday, the EPEX SPOT markets of Germany and the Netherlands, normally in the group with the lowest prices in Europe, approached to the lower end of their more expensive peers, reaching values near €40/MWh.
Prices on the EPEX SPOT markets of France and Belgium, and the Nord Pool market, were around €35 from Monday to Thursday.
Brent, fuels and CO2
The price of Brent oil futures for October on the ICE market had a clearly increasing trend for the first time this month. On Wednesday, they settled at $60.30/bbl. In this market, several factors were at play: the decrease in U.S. crude oil inventories, which was greater than expected; the production cuts OPEC+ nations continue to practise; the global economic slowdown; and the escalation of the trade war between the United States and China.
TTF gas futures on the ICE market for September remained around €11/MWh. A slight comeback in the last three sessions placed them at €11.41/MWh on Wednesday.
For its part, the API 2 coal futures for September on the ICE market have continued to decline since August 14. The settlement price on Wednesday was $55.50/t.
The prices of CO2 emission rights futures on the EEX market for the December 2019 reference contract remained around €26.00-26.50/t.
Electricity futures
The price of electricity futures in Spain for the fourth quarter continued its downward trend last week. This progressive fall on the OMIP market began, after its latest comeback, in early August. Last week the price of the last quarter of 2019 reached a low not seen in more than 12 months. On Wednesday the price settled at €54.70/MWh. In the case of the same product on the EEX market, something very similar happened. A decreasing run since the middle of last month reached a low not seen since September – €54.77/MWh.
As expected, the price of Portugal’s electricity futures on the OMIP market aped the price of Spain’s futures. On Wednesday, the settlement price for the fourth quarter of 2019 was €54.89/MWh. That figure beat the minimum price record set on Friday 16, by 10 cents.
However, futures for next year, both for Spain on the OMIP and EEX markets and for Portugal on the OMIP, have not given much to talk about. Their prices have kept oscillating around €56/MWh. That behaviour neutralizes the apparent fall they presented in the previous week, when in all cases the price was strictly decreasing.
France’s electricity futures for the next quarter on the EEX market also attracted attention. They settled at €51.99/MWh yesterday, a low not recorded for more than a year. This product for France was making its steepest fall for a year as it dropped more than €10/MWh in just over a month. For its part, the future for next year in France also presented decreases, settling on Wednesday at €49.89. However, although the price again broke the €50/MWh barrier, it did not represent a significant record from recent months.
The futures of Germany for next quarter settled on Wednesday at €44.50/MWh. That price was also a 12-month-plus record. That was not the case for futures for next year, which settled on Wednesday at €48.01/MWh, maintaining a downward trend shown for some weeks but without undershooting the values of a few weeks previously.
Mainland Spain wind and PV output
Electricity demand in mainland Spain rose 3.8% last week, compared to the opening of the previous week. This time the increase was due to the 0.7 degree Celsius rise in average temperatures. Logically, last week’s demand was expected to be higher than in the previous week due to the effect of an August 15 national holiday.
Average wind energy production from Monday to Wednesday last week was 57% above that recorded in the previous week and that trend was expected to continue in the remainder of the week.
Solar output – PV and solar thermal – saw a fall of 12% in mainland Spain from Monday to Wednesday last week and the trend was expected to continue.
Nuclear power plants last week maintained a stable operation which should be maintained in the coming weeks as there are no scheduled stops.
Hydroelectric energy production fell 2.6% from Monday to Wednesday compared to the same period of the previous week.
The level of hydroelectricity reserves was at 9,815 GWh, 302 GWh less than in the previous week. The reserves constituted 42% of the total capacity of 23,281 GWh, according to data from the latest Hydrological Bulletin by the Ministry for the Ecological Transition.
