Gas and carbon dioxide prices continued to fall in the fourth week of May, which led to a general downward price trend in the European electricity market and several negative hourly prices were recorded, rising to -400 €/MWh in the Netherlands. A notable exception in the Iberian market, where prices rose, came from the decline in renewable energy production. During the week, solar electricity production records were achieved in Germany, France and Italy.
In the week of May 22, solar electricity production set a daily record in the German and French markets. The French market achieved a historic production of 100 GWh on Friday, May 26, while the German market registered a record production of 353 GWh on May 27. In the Italian market, solar energy production recorded a historical weekly record of 725 GWh, breaking the historical weekly record of 613 GWh registered on April 24.
Compared to the previous week, solar energy production increased in these three market areas. The Italian market was the largest, 88%. In the German and French markets, production growth with this technology was 16% and 10%. On the other hand, solar energy production in the Spanish market decreased by 23% after the previous week’s records, and in the Portuguese market by 17%. AleaSoft Energy Forecasting’s solar production forecast for the week of May 29 predicts that production will increase in Germany and Spain, but may decrease in Italy.
In the fourth week of May, wind energy production decreased in all markets analyzed in AleaSoft Energy Forecasting compared to the previous week. The largest drop was recorded in the Italian market, at 47%, followed by the Iberian Peninsula at 37%. There was a 19% decrease in the German market and 6.3% in the French market.
For the current week, AleaSoft Energy Forecasting’s forecast for wind power production shows that this downward trend will continue in all analyzed markets.
The fourth week of May ended with an increase in electricity demand in most analyzed European electricity markets compared to the previous week. The largest increase of 3.5% was recorded in the markets of Portugal and Belgium, while the smallest increase was recorded in the Spanish market of 0.1%. On the other hand, a 5.1% and a 1.0% decrease in demand was observed in the UK market and in France. In the German, Belgian and Dutch markets, the increase was due to the revival of demand after the bank holiday on May 18, Maundy Thursday.
As for average temperatures, an increase compared to the previous week was observed in almost all analyzed markets. In the case of the UK and France, rising temperatures led to a drop in demand in these markets, despite a recovery in demand on 18 May from the French holiday.
For the week of 29.5. According to the demand forecast by AleaSoft Energy Forecasting, demand is expected to decrease in all main European markets except Portugal.
European electricity market
In the week of 22.5. The prices analyzed in AleaSoft Energy Forecasting in most European electricity markets decreased compared to the previous week. The exceptions are the Portuguese and Spanish MIBEL markets, whose growth was 64% and 70%. On the other hand, the largest price drop of 39% was in the Nordic Nord Pool market, while the markets of Germany, Belgium and France remained without major fluctuations. In other markets, prices fell between 9.6% in the Italian IPEX market and 13% in the Dutch EPEX SPOT market.
In the fourth week of May, weekly prices remained below €100/MWh on the European market. The highest average price, €93.29/MWh, was the price of the Italian market. Instead, the lowest weekly average was in the Nordic market, €13.02/MWh. In the other analyzed markets, the prices were set between €62.40/MWh in the Dutch market and €62.40/MWh in the Portuguese market.
Regarding hourly prices, negative hourly prices were registered in the Dutch market for the most part during the days of the fourth week of May. On Saturday, May 27, negative hourly prices were also recorded in the markets of Germany, France and the Nordic countries. In addition to these markets, the Belgian market also had negative hourly prices on May 28 and 29. The lowest hourly price of the fourth week of May, -400.00 €/MWh, was registered on Sunday, May 28 from 14:00. until 15:00 in the Dutch market and was the lowest in this market since at least April 2011. A new historical minimum record of -12.93 €/MWh was reached in the Nordic markets on Sunday, May 28, starting at 12:00. until 15:00.
During the week of May 22, the average price of gas and CO decreased2 emission rights and the increase in solar energy production led to a decrease in prices on the European electricity market. However, the decrease in wind energy production in, for example, the German or French markets partially offset this downward trend and prices remained stable. On the other hand, in the case of the MIBEL market, the decrease in wind energy production in the Iberian Peninsula contributed to the increase in prices in this market.
AleaSoft Energy Forecasting’s price forecast suggests that in the first week of June, prices may continue to fall in most European electricity markets due to the impact of the drop in demand. On the other hand, prices in the Iberian market may continue to rise due to the low production of wind energy.
Brent, fuels and CO2
In the fourth week of May, the front-month settlement prices of Brent oil futures on the ICE market remained above USD 75 per barrel. The weekly minimum settlement price of $75.99 per barrel was registered on Monday, May 22 and was already 1.0% higher than the previous Monday. The increases continued until Wednesday, May 24, when the maximum weekly settlement price was reached at $78.36 per barrel, which was 1.8% higher than the previous Wednesday. On Thursday, the settlement price fell, but in the last session of the week, Friday, May 26, it recovered to $76.95 per barrel. The price was 1.8% higher than the previous Friday.
During the week of May 22, the US debt ceiling negotiations continued to affect Brent crude oil futures prices. In addition, expectations of the upcoming OPEC+ meeting on June 4 and possible interest rate increases in the United States also affected prices and may also affect them in the coming days.
On Monday, May 22, front-month TTF gas futures on the ICE market reached a weekly maximum settlement price of €29.71/MWh, although the price was 8.1% lower than the previous Monday. In the fourth week of May, settlement prices fell. As a result, the weekly minimum settlement price of €24.52/MWh was reached on Friday, May 26. This price was 19% lower than the previous Friday and the lowest since May 2021.
In the fourth week of May, the abundant supply of LNG continued to affect TTF gas futures prices. Information about the development of the German economy and fears about the effects of this development on demand also contributed to the drop in prices.
in terms of CO2 Emission rights futures on the EEX market for the December 2023 reference contract reached the weekly minimum settlement price of €87.76/t on Monday, May 22, which was 0.9% higher than the previous Monday. However, this price was €2.12/t lower than in the last session of the previous week. During the rest of the week, prices continued to fall, until on Friday, May 26, the weekly minimum settlement price of €82.30/t was registered. The price was 8.4% lower than the previous Friday and the lowest since January.