In the third week of February, prices fell in the main European electricity markets, with most of them reaching weekly averages below €110/MWh. Several factors contributed to these declines. On the one hand, the fall in gas and CO2 prices, as well as the decline in demand. On the other hand, the increase in renewable energy production. Photovoltaic energy increased, registering records for a February day in Germany, Italy and Portugal. In addition, wind energy production increased in several markets.
Solar photovoltaic and wind energy production
In the week of February 17, solar photovoltaic energy production increased compared to the previous week in all major European electricity markets. This upward trend reversed the decreases registered during the previous week. The German market led the way with an increase of 179%. The Italian and French markets registered increases of 17% and 11%, respectively. At the same time, Spain registered an increase of 1.5% and Portugal an increase of 0.9%.
In the third week of February, the German, Italian and Portuguese markets broke all?time records of solar photovoltaic energy production for a February day. On the 19th, the German market produced 211 GWh using photovoltaic energy, values last seen at the end of September 2024. Two days later, on Friday, February 21, the Italian market produced 81 GWh using this technology, reaching levels last seen in mid?October 2024. On Sunday, February 23, the Portuguese market generated 18 GWh, values last seen at the end of September 2024.
In the week of February 24, according to AleaSoft Energy Forecasting’s solar energy forecasts, solar energy production will decrease in Spain, Germany and Italy, reversing the previous week’s upward trend.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
In the week of February 17, wind energy production increased in most major European markets compared to the previous week, reversing the downward trend of the previous two weeks. The French market registered the largest increase, 93%. In the German and Spanish markets, wind energy production increased by 35% and 8.6%, respectively. The exceptions were the Italian and Portuguese markets, where wind energy production decreased by 63% and 4.4%, respectively.
In the week of February 24, according to AleaSoft Energy Forecasting’s wind energy forecasts, wind energy production will increase in Italy and Spain, but it will decrease in Germany, France and Portugal.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
During the week of February 17, electricity demand showed a downward trend in the main European electricity markets. The Dutch and British markets registered double?digit declines, 16% and 11%, respectively, reversing the upward trend of the previous week. In the rest of the markets, declines ranged from 2.0% in Portugal to 8.0% in France. The exception was the Italian market, where demand increased by 0.3%, following the previous week’s decline.
These decreases in demand were associated with increases in average temperatures. Belgium, the Netherlands and Great Britain registered increases in average temperatures between 3.8 °C and 4.8 °C. Portugal registered the smallest increase in average temperatures, with a 0.6 °C rise. Once again, Italy was the exception with a 0.8 °C decrease in average temperatures.
In the week of February 24, according to AleaSoft Energy Forecasting’s demand forecasts, demand will increase in the Portuguese, Spanish and Dutch markets. On the contrary, demand will decrease in the German, French, Belgian, Italian and British markets.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
In the third week of February, average prices in the main European electricity markets fell compared to the previous week. The IPEX market of Italy registered the smallest decline, 6.9%, while the Nord Pool market of the Nordic countries registered the largest percentage price drop, 39%. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices fell between 25% in the MIBEL market of Spain and Portugal and 30% in the EPEX SPOT market of Belgium.
In the week of February 17, weekly averages were below €110/MWh in most major European electricity markets. The exception was the Italian market, which reached the highest weekly average, €148.38/MWh. On the other hand, the Nordic market registered the lowest average, €53.80/MWh. In the other markets, prices ranged from €87.67/MWh in the Iberian market to €106.32/MWh in the Dutch market.
Regarding daily prices, as a consequence of the decreases, in the last four sessions of the third week of February, prices of most analyzed electricity markets remained below €100/MWh. On February 22, the Nordic market reached a price of €15.07/MWh, which was the lowest price of the week in the analyzed markets.
In the week of February 17, the fall in gas and CO2 emission allowance prices and the increase in solar energy production led to lower European electricity market prices. In addition, in most analyzed markets, wind energy production increased and demand decreased.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the fourth week of February, prices will continue to fall in most European electricity markets, influenced by declining demand in most markets. Increased wind energy production in Spain and Italy will also contribute to these declines.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
Settlement prices of Brent oil futures for the Front?Month in the ICE market registered an upward trend in most sessions of the third week of February. As a result, on Thursday, February 20, these futures reached their weekly maximum settlement price, $76.48/bbl. However, on Friday, February 21, after a 2.7% drop from Thursday, these futures registered their weekly minimum settlement price, $74.43/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 0.4% lower than the previous Friday and the lowest since February 7.
Supply problems in Russia and the United States drove Brent oil futures prices higher in the third week of February. On the one hand, Russian supply decreased due to damage caused by a Ukrainian attack. On the other hand, US production was affected by low temperatures. However, peace negotiations for Ukraine exerted their downward influence on prices, contributing to their decline at the end of the week. In addition, an increase in Iraqi oil supply was announced on Sunday, which may exert its downward influence on prices in the last week of February.
As for settlement prices of TTF gas futures in the ICE market for the Front?Month, they remained below €50/MWh during the third week of February. On Tuesday, February 18, these futures reached their weekly maximum settlement price, €49.21/MWh. Subsequently, prices declined. As a result, on Friday, February 21, these futures registered their weekly minimum settlement price, €47.19/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 6.9% lower than the previous Friday and the lowest since January 18.
In the third week of February, reduced demand due to milder temperatures led to lower TTF gas futures prices, despite low European reserve levels. The possibility of an increase in Russian gas supply in the event of an end to the war in Ukraine also exerted its downward influence on prices.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2025, they reached their weekly maximum settlement price, €77.21/t, on Monday, February 17. However, this price was 3.2% lower than the previous Friday. The downward trend continued until Thursday, February 20. On that day, these futures registered their weekly minimum settlement price, €72.67/t. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since January 9. In the last session of the week, there was a slight recovery. As a result, on Friday, February 21, the settlement price was €73.90/t, still 7.3% lower than the previous Friday.
Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.
AleaSoft Energy Forecasting’s analysis on the prospects for energy markets and energy storage in Europe
On Thursday, March 13, AleaSoft Energy Forecasting will hold the 53rd webinar in its monthly webinar series. This webinar will feature speakers from EY for the fifth consecutive year. In addition to the evolution and prospects of European energy markets, the webinar will analyze the prospects for energy storage, in the context of decreasing battery prices and growing hybridization of storage with renewable technologies. Other discussed topics will be regulation, financing of renewable energy projects, PPA, self?consumption and key aspects for portfolio valuation.
