AleaSoft: Electricity market prices rise as a result of low solar and wind energy production

Solar power production during the first three days of this week in Germany, Spain and Italy has been lower than last week. The decline in renewable production in the European continent, both wind power and solar energy, has led to an increase in prices in most markets. Meanwhile, in the futures markets of Brent, gas and coal the predominant behavior has been downward, and in the CO2 market it has been on the rise.

Solar photovoltaic and concentrated solar power production, wind energy production and electricity demand
So far this week, solar production fell in Spain, Germany and Italy compared to the average level last week. The variation in Germany was only -4.0%, while in Italy it was more significant, registering a decrease of 26%. The averages recorded in these first three days in Germany, Spain and Italy, were 70 GWh, 25 GWh and 21 GWh respectively, approaching the weekly average at the end of January and the seasonal levels of this stage of the year.

With only one day left to count all the data for October, so far this month a greater solar production has been achieved in interannual terms, with values ??of 29% and 13% for Spain and Italy, respectively. On the contrary, in Germany there has been 13% less generation with this renewable source in the same period.

In the case of wind production, there have also been significant declines in the countries analyzed during the first three days of this week, compared to the average values ??of last week. Among the significant decreases is that of Germany, which fell by 53%, followed by Italy and France, with 35% and 31% respectively.

Analyzing the behavior from October 1 to 30, 2018 and 2019, France and Germany have increased their wind production by 38% and 8.9%, respectively. For the rest of the countries analyzed, the results of this comparison show decreases between 12% and 16%.

On the other hand, the electricity demand has increased in a large part of the continent during the first three days of this week compared to that of the same days last week, the most significant increase being that of Great Britain, of a 4, 2%. So far this week the average temperatures have dropped considerably in most of the continent. The biggest decrease has occurred in Germany, where the average temperatures of the first three days of this week have been 7 ° C lower than the average temperatures of last week. Only in the Iberian Peninsula temperatures have been on average higher than last week, of the order of 3 ° C.

Spain peninsular, photovoltaic and solar thermal production and wind production
Within the peninsular territory of Spain, this week the average values ??of solar production have decreased, which includes photovoltaics and solar thermal, by 18% so far. Despite this decrease, solar production has increased by 29% in Spain this October, year-on-year.

For its part, the average wind production so far this week has continued to decline in Spain, falling by 28% and significantly affecting the total of October, which with data up to October 30 is 16% lower than what is recorded in the same 2018 period.

The average temperatures in Spain this week have been higher than last week’s average, with a difference of 3 ° C. Consequently, the electricity demand has decreased during the first three days of this week by 1.0% compared to the same period last week. According to AleaSoft’s analysis, at the end of the week the total demand will be lower than last week, since the effect of the national holiday of All Saints must be added to the effect of the temperatures.

The Almaraz II nuclear power plant is still at a scheduled stop for refueling, while the rest of Spain’s nuclear plants are still running.

Currently, the level of hydroelectric reserves is 7830 GWh, which represents an increase of 2.7% over the previous week. This available energy is 34% of the total capacity, according to data from the latest Hydrological Bulletin of the Ministry for Ecological Transition.

European electrical markets
So far this week the average price of most European electricity markets has increased compared to the previous week, with the exception of the IPEX market in Italy, which this week has experienced a more moderate decrease of –0.9%, after presenting a 19% cross-weekly fall last week. The rest of the markets analyzed increased between 3.8% corresponding to the EPEX SPOT market in the Netherlands and 9.0% in the EPEX SPOT market in France. The low wind production as well as the decrease in temperatures that led to an increase in demand in most of Europe has led to this rise in electricity prices.

During the first four days of this week, the prices of most markets have been fairly aligned between € 45 / MWh and € 50 / MWh, while the Nord Pool market in the Nordic countries has been downgraded to be the with the lowest average price in Europe, with € 40.18 / MWh and the MIBEL market in Spain and Portugal, has been downgraded, in this case upwards, to be the highest average price in Europe, with € 52.25 / MWh and € 52.20 / MWh respectively.

During this month of October the EPEX SPOT market in Germany has been the lowest price in Europe, with a monthly average of € 36.96 / MWh, while the Italian IPEX market continued to be the market with the highest price, with an average monthly price of € 52.84 / MWh.

Iberian Market
Between October 28 and 31, average prices in the MIBEL market in Spain and Portugal have increased 7.2% and 9.9% respectively when compared to last week’s average prices. So far this week these MIBEL markets have been in the top positions of the ranking of the average prices in Europe.

Since Friday, October 25, the average daily prices of the MIBEL market for both countries have positioned themselves as those with the highest price in Europe, being higher than those of the IPEX market in Italy between € 1.89 / MWh and € 5.57 / MWh . This increase in prices has been conditioned by the low wind and solar production of these last days.

In this month of October, the MIBEL market of Portugal and Spain has closed with an average monthly price of € 47.21 / MWh and € 47.17 / MWh, respectively, positioning itself as the second and third with the highest prices of European electricity markets analyzed.

Electricity futures
The electricity futures of a large part of the European markets analyzed, both for the next quarter and year, have generally continued the decreasing trend that they have been experiencing in some cases since mid-October. Although the last two days, on October 29 and 30, in some markets there have been increases, the prices of yesterday October 30 were lower than those of last Friday October 25. However, the electricity futures of the Nordic countries in the ICE and Nasdaq markets do not have the same decreasing trend of the other markets for the two products analyzed and, except for the futures of the first quarter of 2020 in the Nasdaq market, which in the Yesterday’s session fell 0.6% compared to Friday, in the other cases the price rose to 1.0% in 2020 in the ICE market.

By focusing the analysis on the futures of Spain and Portugal, in the OMIP market the closing price of the two products in yesterday’s session was 0.6% below Friday. In the case of Spain’s futures in the EEX market, the declines were 0.8% for Q1-20 and 0.7% for Cal-20.

Brent, fuels and CO2
The prices of Brent oil futures for the month of December in the ICE market, after last Friday they reached the maximum value so far this month of $ 62.02 / bbl, this week have been a bit lower and with a downward trend. As a result of this behavior, on Wednesday, October 30, the closing price was $ 60.61 / bbl, 0.9% lower than the Wednesday of the previous week. This is related to the pace of production in the United States and the levels of its crude oil reserves. A rise in oil reserves worldwide could cause a decrease in prices. However, it is expected that at the OPEC + meeting scheduled for the month of December they will agree to maintain production cuts that prevent it.

The prices of TTF gas futures in the ICE market for the month of November began the week continuing with the downward trend of last week. On Monday and Tuesday of this week they experienced daily decreases of 4.5% and 4.8%, respectively. However, on Wednesday, October 30, the same closing price on Tuesday was reached, of € 13.85 / MWh.