In the first week of May, European electricity markets prices fell due to the drop in gas and CO2 prices. In addition, the demand decreased in most markets and wind and solar energy production increased in some cases, reaching record values for hourly solar photovoltaic energy production in almost all markets. Brent and TTF gas futures reached the lowest prices since December and July 2021, respectively, and CO2 registered the lowest price since January.
Solar photovoltaic and thermoelectric energy production and wind energy production
During the first week of May, the solar energy production increased in almost all European markets analysed at AleaSoft Energy Forecasting. The exception was the Italian market with a decrease of 1.8%. On the other hand, the largest rise, of 33%, was registered in France. In Germany the increase was 24%. In the case of Spain, an increase of 12% was registered, while the smallest increase, of 1.8%, was that of the Portuguese market.
On the other hand, in the first week of May, historical maximums of hourly solar photovoltaic energy production were reached in almost all analysed markets. On May 3, from 13:00 to 14:00, a record solar photovoltaic energy production of 12 739 MWh was reached in the French market. In the German market, on Thursday, May 4, from 12:00 to 13:00, a maximum value of solar photovoltaic energy production of 38 283 MWh was reached. In the case of Spain, the solar photovoltaic energy production reached a record value of 15 331 MWh on Friday, May 5, from 13:00 to 14:00. Finally, in Italy, on Saturday, May 6, from 13:00 to 14:00, a maximum value of 13 400 MWh was registered.
For the second week of May, the AleaSoft Energy Forecasting’s solar energy production forecasting indicates that it may continue to increase in Germany, while in Spain and Italy it may decrease.
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.
During the week of May 1, the wind energy production increased in most European markets analysed at AleaSoft Energy Forecasting. The largest rise, of 42%, was that of the Portuguese market. In the case of the Spanish and French markets, the increases were 14% and 19%, respectively. On the other hand, in Germany the production with this technology fell by 16%. In the case of the Italian market, the decrease reached 18%.
For the week of May 8, the AleaSoft Energy Forecasting’s wind energy production forecasting indicates that the production may increase in the Spanish, Portuguese and Italian markets and decrease in the rest of the analysed markets.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of May 1, the electricity demand decreased in most European markets analysed at AleaSoft Energy Forecasting compared to the previous week. The exceptions were the Portuguese, Dutch and Italian markets, with increases of 0.5%, 1.6% and 5.3%, respectively. On the other hand, the largest fall, of 9.9%, was that of the British market. In the rest of the markets, the demand decreased between 3.9% of the Spanish and Belgian markets and 8.4% of the French market.
In the first week of May, the demand in most markets was affected by the holiday of May 1, and in the case of the British market, by the festivities associated with the coronation of King Charles III of the United Kingdom. In addition, increases in average temperatures compared to the previous week were registered in almost all analysed markets.
For the week of May 8, according to the demand forecasting made by AleaSoft Energy Forecasting, the demand is expected to increase in the European 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 week of May 1, prices of all European electricity markets analysed at AleaSoft Energy Forecasting fell compared to the previous week. The largest price drop, of 12%, was that of the EPEX SPOT market of France. On the other hand, the smallest decrease, of 0.9%, was registered in the Nord Pool market of the Nordic countries. In the rest of the markets, the decreases were between 2.0% of the EPEX SPOT market of the Netherlands and 11% of the EPEX SPOT market of Belgium.
In the first week of May, the highest average price, of €113.28/MWh, was that of the IPEX market of Italy. On the other hand, the lowest weekly average was that of the Nordic market, of €78.12/MWh. In the rest of the analysed markets, prices were between €87.75/MWh of the MIBEL market of Spain and €100.90/MWh of the N2EX market of the United Kingdom.
Regarding hourly prices, in the MIBEL market of Spain, on Monday, May 1, two hours with a price of €0/MWh were registered, between 15:00 and 17:00. On the other hand, in the German market negative hourly prices were reached on Sunday, May 7, from 12:00 to 15:00. The lowest hourly price, ?€0.99/MWh, was reached from 13:00 to 14:00.
During the week of May 1, the decrease in the average price of gas and CO2 emission rights, as well as the drop in demand and the increase in solar energy production in most markets led to the decrease in European electricity markets prices. In the case of the Spanish, French and Portuguese markets, the wind energy production also increased, allowing averages lower than €91/MWh to be registered in these markets.
The AleaSoft Energy Forecasting’s price forecasting indicates that in the second week of May prices may increase in most European electricity markets, influenced by the increase in demand in most markets, as well as by the decrease in the wind energy production in markets such as Germany and France. However, in the MIBEL market, prices may continue to fall under the influence of significant increases in wind energy production in the Iberian Peninsula.
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 remained below $80/bbl during the first week of May. The weekly maximum settlement price, of $79.31/bbl, was reached on Monday, May 1, and it was 4.1% lower than that of the previous Monday. Subsequently, prices fell until registering the weekly minimum settlement price, of $72.33/bbl, on Wednesday, May 3. This price was 6.9% lower than that of the previous Wednesday and the lowest since December 2021. In the last sessions of the week, prices increased. As a result, the settlement price of Friday, May 5, was $75.30/bbl, still 5.3% lower than that of the previous Friday.
In the first week of May, Brent oil futures prices were influenced downwards by concerns about the evolution of the demand and fears of an economic recession. However, the publication of data on the decline in oil reserves of the United States and on the evolution of employment in April in this country contributed to the recovery of prices at the end of the week.
As for TTF gas futures in the ICE market for the Front?Month, on Monday, May 1, they reached the weekly maximum settlement price, of €38.83/MWh, although this price was 2.7% lower than that of the previous Monday. In the first four days of the week of May 1, prices fell. As a consequence, on Thursday, May 4, the weekly minimum settlement price, of €35.65/MWh, was registered. This price was 8.7% lower than that of the previous Thursday and the lowest since July 2021. But on Friday, May 5, prices increased until reaching a settlement price of €36.57/MWh.
In the first week of May, high reserves for the time of year and abundant supply continued to favour the decrease in TTF gas futures prices.
Regarding CO2 emission rights futures in the EEX market for the reference contract of December 2023, in the first session of the week, on Tuesday, May 2, the weekly maximum settlement price, of €88.41/t, was reached. This price was 1.6% higher than that of the previous Tuesday. Subsequently, prices fell until reaching the weekly minimum settlement price, of €84.67/t, on Thursday, May 4. This price was 1.6% lower than that of the previous Thursday and the lowest since the end of January. On Friday, May 5, prices recovered slightly and a settlement price of €84.96/t was registered.
Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.
AleaSoft Energy Forecasting’s analysis on the prospects for energy markets and the financing of renewable energy projects in Europe
The next webinar of the series of monthly webinars of AleaSoft Energy Forecasting and AleaGreen is scheduled for this Thursday, May 11. The webinar will analyse the evolution and prospects of European energy markets, as well as the vision of the future of the energy sector. In addition, Luis Atienza Serna, who was General Secretary of Energy and Minister of the Government of Spain, will participate in the analysis table of the Spanish version of the webinar.
On the other hand, PPA are going to play an increasingly important role in the electricity markets, since they help to reduce the market price risk and facilitate the renewable energy projects financing. The long?term price forecasting is essential in the negotiation of PPA. In the case of AleaGreen’s price forecasting for European markets, they have a 30?year horizon, hourly granularity and confidence bands.
