European renewable production lowers the prices of the main electricity markets

Solar photovoltaic and concentrated solar power production, wind power production and electricity demand
From Monday to Wednesday of this week, solar production has recovered 21% in Italy compared to the average production last week. Similarly, a recovery of 8.5% has occurred in Spain. In the case of Germany, the generation from this technology has had a decrease compared to the average level of last week of 37%.

At the beginning of November, solar production had a good performance both in Italy and in Spain compared to the first six days of November 2018, with increases of 35% and 17% respectively. On the other hand, Germany has registered 23% less year-on-year solar production in the same period.

As regards wind energy production, it has behaved increasingly during the first three days of this week in most of the European countries analyzed, compared to the average values ??of last week. In Italy it has been close to tripling the average of the week of October 28, with an average of 104 GWh that has exceeded the average weekly level since 2018. The increase in generation with this renewable source in the Iberian Peninsula has been 58 %, while in Germany and France there have been declines of 28% and 1.4% respectively.

Increases in wind power production in the days since this November have been between 46% in the case of Germany and 112% in Italy, compared to the same period of 2018. In general, there were increases in production in all the countries examined, among which France and Spain also stand out, with 99% and 96% variations respectively.

The lowering of average temperatures in several countries has led to increases in electricity demand in much of the analyzed European territories. For the cases of France, Portugal and Spain, the increases have been 4.6%, 1.8% and 1.0% respectively. According to AleaSoft’s analysis, increases in electricity demand in several countries are expected next week due to possible temperature decreases.

Spain peninsular, photovoltaic and solar thermal production and wind production
Spain is one of the European countries where production with renewable energy has increased so far this week compared to the average level of last week. Such is the case of solar production, which includes photovoltaic and solar thermal, which rose 8.5%, and wind production that had an increase of 61%.

The variation in electricity demand in mainland Spain so far this week has been 1.0% compared to the same period last week. One of the factors that caused this increase has been the decrease in temperatures.

As for the state of operation of the Spanish nuclear park, in addition to the stop for refueling of the Almaraz II nuclear power plant that began in the first week of October, last Sunday, November 3, it entered a scheduled stop for the same reason. Cofrentes nuclear power plant. It is planned that the first one will be launched on November 10, while the second one will be operational on December 9 of this year. Soon, the Vandellós II nuclear power plant will also have a scheduled stop between November 9 and December 12, 2019.

Due to the current shutdowns of two of the nuclear power plants in Spain, the average nuclear production of the first 3 days of the week has been 11% below the average values ??of last week.

According to data from the latest Hydrological Bulletin of the Ministry for Ecological Transition, the current level of hydroelectric reserves is 7905 GWh. This accumulated represents an increase of 0.8% compared to the last bulletin and 34% of the total capacity.

European electrical markets
The average price of most European electricity markets so far this week has fallen compared to the same period last week, with the exceptions of the Nord Pool market of the Nordic countries and the N2EX market of Great Britain, which had increases 15% and 3.3% respectively. The rest of the countries have shown decreases between 1.2% of the EPEX SPOT market in the Netherlands and 34% of the MIBEL market in Spain and Portugal. High wind production in much of Europe during the first three days of this week has led to this downward trend in electricity prices despite higher demand. Italy has been the only country where demand has declined in the face of a very slight increase in temperatures, which together with high wind production have allowed the price to fall by 11% in the IPEX market.

This week most of the markets have been very coupled with average values ??around € 44 / MWh. The usual distribution of the markets in two groups according to their price this week has not been fulfilled. In fact, the MIBEL market, which is normally in the group of markets with higher prices, and that last week was a large part of the day with the highest price in Europe, this week has been the lowest price in the continent. In the highest position in terms of prices is the N2EX market, usually in this group, with an average price of € 47.78 / MWh. It is followed by the Nord Pool market, usually in the group with the lowest prices, with an average price of € 46.15 / MWh.

Iberian Market
The average price of the first four days of this week in the MIBEL market has been € 34.51 / MWh, both for Spain and Portugal. With a decline of 34%, these markets have been € 8.95 / MWh below the Italian market, the second with the lowest average price. These decreases occur as a continuation of the record price on Sunday, November 3, when the lowest average daily price of the year, of € 18.88 / MWh, was reached.

After having the highest daily average prices for most of last week, as of Friday, November 1, prices have begun to fall, mainly due to the high wind production that has been registering since it began this month. On Monday, November 4, the lowest price was recorded so far this week with an average of € 28.48 / MWh for both markets and a peninsular wind production of 441 GWh, the highest recorded since the beginning of February this year. However, this Wednesday, November 6, the highest average daily price was recorded so far this week, of € 40.64 / MWh, with an increase of 37% over the previous day, due to a decrease in wind production of equal magnitude

Electricity futures
Electricity futures for the next quarter have started in November with declines in almost all the European markets analyzed. The exceptions were the ICE and NASDAQ markets of the Nordic countries, where increases of 3.3% and 3.6% respectively were recorded. The decreases in the rest of the markets analyzed were between 0.1% of the ICE market in the Netherlands and 2.4% of the OMIP markets in Spain and Portugal.

As for the prices of electricity futures for the year 2020, they decreased 0.7% in the OMIP markets of Spain and Portugal and in the EEX market of Spain, 0.5% in the EEX market of Great Britain and 0.3% in the ICE market of this country. While in the rest of the markets analyzed, prices rose between 0.1% of the EEX market in France and 3.0% of the ICE and NASDAQ markets in the Nordic countries.

Brent, fuels and CO2
Brent oil futures prices for the month of January in the ICE market began in November with an upward trend. This behavior allowed a closing price of $ 62.96 / bbl to be reached on Tuesday, November 5, which is the highest since September 16 reached $ 66.55 / bbl following the attacks suffered in two oil facilities in Saudi Arabia, which caused the reduction of production in this country by more than half. Subsequently, on Wednesday, November 6, prices fell 1.9%, remaining at $ 61.74 / bbl. This decline is related to the fact that US oil reserves have increased above the expected last week. On the other hand, the delay until December of the meeting to discuss a possible trade agreement between China and the United States, and the uncertainty about whether it will finally be agreed to keep the production cuts at the OPEC + meeting in December, could lead to to a decrease in prices in the month of November.

The prices of TTF gas futures in the ICE market for the month of December began this month with an upward trend and the first days of this week have reached higher values ??than those recorded on the same days last week. The day of greatest difference with respect to the same day of the previous week, of 3.8%, was on Tuesday, November 5, when the maximum value of the week was reached, of € 16.79 / MWh. The price trend changed on Wednesday, November 6, when the price fell 3.0% compared to Tuesday, closing at € 16.28 / MWh.

The increase in wind energy production in Europe along with the high levels of gas reserves and excess supply could slow the rise in prices of TTF gas futures despite the expected temperature drops for the coming weeks.

The prices of API 2 coal futures in the ICE market for the month of December, during the first days of November ranged between $ 58.25 / t on Monday, November 4 and $ 58.70 / t of November 1 and 5. However, on Wednesday, November 6, the price dropped 1.8%, standing at $ 57.65 / t.

The CO2 emission rights futures in the EEX market for the December 2019 reference contract, started this week with a price of € 25.64 / t, a value of € 0.34 / t above the closing price from Friday, November 1. However, during this week prices have fallen every day until reaching a closing price of € 24.79 / t, on Wednesday, November 6. Although fears about an exit without UK agreement from the European Union seem to dissipate at the moment, the global economic slowdown could be beginning to influence the futures prices of CO2 emission rights.