In the third week of May, most of the European electricity markets registered negative or zero hourly prices, especially during the weekend. The -5.67 €/MWh registered on the Nord Pool market during the hour on Sunday, May 21 is the lowest in history. Throughout the week, prices fell in all markets, which was due to lower demand and gas prices, as well as higher solar and wind energy production in several markets than the previous week.
AleaSoft Energy Forecasting’s solar production forecast for the week of May 22 predicts that production will increase in Germany and Italy, but could decrease in Spain.
In the third week of May, like solar electricity production, wind energy production set a record in the Iberian Peninsula, totaling 1,830 GWh in Spain and 326 GWh in Portugal, when compared to the 20th week of the year. the last five years. Compared to the previous week, growth was observed in almost all analyzed markets, between 31% in Germany and 51% in France. Production with this technology also increased in the Spanish and Italian markets, in Spain by 37% and in Italy by 39%. However, a 6.9 percent drop was observed in Portugal.
For the current week, AleaSoft Energy Forecasting’s wind power production forecast suggests that production may decrease in all analyzed markets.
The third week of May ended with a decrease in electricity demand in all analyzed European markets compared to the previous week. This behavior is related to the celebration of Ascension Day on May 18 in several main European markets. The largest drop, 18 percent, was observed in the Netherlands. On the other hand, the smallest decrease was in Italy, 1.4%, and in Spain, where the decrease was 1.7%. In these two markets, May 18 was not a day off.
As for average temperatures, a decrease compared to the previous week was recorded in almost all analyzed markets except Great Britain and Italy, where they remained fairly similar to the previous week.
For the week of 22.5. according to the demand forecast AleaSoft’s energy forecastdemand is expected to grow in all major European markets except Spain and Great Britain.
European electricity market
In the week of May 15, prices fell in all European electricity markets compared to the previous week. The largest drop, 56%, was recorded in the Nordic Nord Pool market. On the other hand, the smallest price drop, 9.9%, was on the N2EX market in Great Britain. In other markets, the declines were 14% in the Italian IPEX market and 35% in the Spanish MIBEL market.
In the second week of May, the highest average price of €103.21 ($111.63)/MWh was in the Italian market, followed by the UK N2EX market with an average price of €91.46/MWh. Instead, the lowest weekly average price was the Nordic market price, €21.23/MWh. In other markets, the prices were set between €48.07/MWh for the Spanish market and €74.43/MWh for the German EPEX SPOT market.
Hourly prices in the Spanish market registered a zero price value on Sunday, May 21, between 10:00 and 11:00. In addition to zero price hours, negative prices were registered in the markets of Germany, Belgium, France and the Netherlands on the weekend of May 20 and 21. This also happened on Wednesday 17 May in the Netherlands. Regarding the Nordic markets, negative prices were recorded for the days 20 and 21 May. In this market, the historical minimum, at least since 2011, of -5.67 €/MWh was reached on Sunday, May 21, between 13:00 and 14:00. On the other hand, the lowest hourly price of -76.00 €/MWh in the third week of May was registered on the same day, at 12.00-13.00, in the Dutch market.
During the week of May 15, the drop in the average price of gas and the general drop in demand led to a drop in prices on the European electricity market. These declines were also influenced by the increase in wind energy production in most markets and the increase in solar energy production in France and Germany.
AleaSoft Energy Forecasting’s price forecast shows that in the fourth week of May, prices may rise in most of the European electricity markets due to the recovery of demand and the decrease in wind energy production.
Brent, fuels and CO2
The weekly minimum settlement price for front-month Brent oil futures on the ICE market was $74.91 per barrel on Tuesday, May 16. This price was 3.3% lower than the previous Tuesday. However, prices rose on Wednesday, May 17, reaching a weekly maximum settlement price of $76.96 per barrel, which was 0.7% higher than the previous Wednesday. Later, prices fell until a settlement price of $75.58 per barrel was registered on Friday, May 19. The price was still 1.9% higher than the previous Friday.
Negotiations on the US debt ceiling affected Brent oil futures prices in the third week of May. On the other hand, fears of interest rate hikes due to US inflation and their effect on demand lowered prices. The release of data on growing US oil inventories also contributed to this effect.
On Monday, May 15, the front-month TTF gas futures of the ICE market reached the maximum weekly settlement price of €32.31/MWh, although the price was 12% lower than the previous Monday. In the third week of May, settlement prices were lower than on the corresponding days of the previous week. On Thursday, May 18, the weekly minimum settlement price of €29.78/MWh was reached. This price was 15% lower than the previous Thursday and the lowest since June 2021.
In the third week of May, the abundance of LNG supplies in a scenario where demand has fallen, continued to lower prices.
in relation to CO2 emission rights futures on the EEX market for the December 2023 reference contract on Monday 15 May. fell 1.7% compared to the last session of the previous week. On that day, the weekly minimum settlement price of €86.97/t was reached. But later the prices rose and remained above €88/t at the end of the third week of May. On Friday, May 19, the weekly maximum settlement price of €89.88/t was reached, which was 1.6% higher than the previous Friday and the highest since April 20.
On June 8th, the number 34 of AleaSoft Energy Forecasting and AleaGreen monthly webinars will be held.. This issue again features speakers from Engie Spain, who will analyze the fundamentals of financing renewable energy projects and PPAs, as well as the main regulatory issues in the Spanish electricity sector, based on their experience in these areas. In addition, the usual analysis of the development and future prospects of the European energy market is carried out with an eye on the second half of 2023 and the coming winter.