In the second week of August, TTF gas futures prices continued their upward trend from the previous week, reaching levels above €40/MWh, which has not been seen since early December 2023. However, most of the main European electricity markets resisted the rise in gas prices and reached lower prices than the previous week, thanks to lower demand and, in some cases, higher renewable energy production. In France, solar photovoltaic energy broke the all-time record for daily production, and Germany and Italy registered the highest PV energy production for an August month.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of August 5, solar energy production increased in most of the main European electricity markets compared to the previous week. The Portuguese market registered the largest increase of 5.6%, recovering from the previous week’s decline. The Italian market registered the smallest increase, for the second week in a row, this time by 1.2%. The exception to the upward trend was the German market, where solar production fell by 0.9%.
The French market, where the week-on-week increase was 1.6%, broke the all-time record for daily solar photovoltaic energy production on August 5, with 129 GWh generated. The German market, despite the week-on-week decrease, registered the highest daily solar energy production for the month of August on August 6, with 386 GWh generated. Likewise, on August 9, the Italian market registered the highest daily solar energy production for the month of August, generating 126 GWh.
In the week of August 12, according to AleaSoft Energy Forecasting‘s solar energy production forecasts, solar energy production will increase in Germany and decrease in Italy and Spain.
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 contrast to the evolution of solar energy production during the week of August 5, wind energy production in the main European markets decreased compared to the previous week. Decreases ranged from 4.5% in the French market to 47% in Italy. Once again, the German market was the exception, with an 82% increase in wind energy production, reversing the downward trend of the previous four weeks.
For the week of August 12, according AleaSoft Energy Forecasting’s wind energy production forecasts, the downward trend will be reversed and wind energy production will increase in France, Germany, Italy and the Iberian Peninsula.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of August 5, electricity demand decreased in most of the main European electricity markets compared to the previous week. The Italian market registered the largest decrease of 12%, while the Dutch market registered the smallest decrease of 1.4%. In both markets, the downward trend continued for the third and fifth consecutive week. In contrast, demand increased in the Belgian and German markets, up 2.1% and 0.1% respectively. In these markets, the upward trend continued for the second week in a row.
Average temperatures in the second week of August were lower than the previous week in most of the markets analyzed. The decreases ranged from 0.1°C in Spain to 1.3°C in Great Britain. However, average temperatures in Germany and the Netherlands were 0.1°C and 0.4°C higher, respectively, than the previous week, while in Portugal they were similar to the first week of August.
According to AleaSoft Energy Forecasting‘s demand forecasts for the week of August 12, the downward trend will continue in most of the main European electricity markets. Demand will decrease in Belgium, Spain, France, Germany, Italy and Portugal, and is expected to increase in the Netherlands and Great Britain.
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 August 5, weekly average prices in most of the main European electricity markets were lower than the previous week. The EPEX SPOT market in France showed the largest price variation with a decrease of 43%. In this market, daily prices decreased every day of the week, from €46.52/MWh on Monday, August 5 to €12.79/MWh on Sunday, August 11. The second and third markets with the largest decreases were the N2EX market of the United Kingdom and the Nord Pool market of the Nordic countries, with decreases of 31% and 29%, respectively. In the rest of the main European electricity markets where prices fell, declines ranged from 1.6% in the MIBEL market of Spain to 16% in the EPEX SPOT market of Belgium.
The IPEX market of Italy was the only main European markets where prices were higher than in the week of July 29, with an increase of 7.1%. This market registered the highest weekly average price of €128.70/MWh. It also registered the two highest daily prices so far in 2024, at €136.28/MWh on August 12 and €133.75/MWh on Thursday, August 8.
In the rest of the main European electricity markets, weekly prices ranged from €17.22/MWh in the Nordic countries’ market to €93.85/MWh in the Portuguese market.
During the second week of August, most markets registered negative price hours between Friday, August 9 and Sunday, August 11, and the Belgian and Dutch markets also on August 7. The lowest price of the week, €59.97/MWh, was registered on the Dutch market between 13:00 and 14:00 on August 11. No negative prices were registered on the Italian market during the week of August 5, while the Iberian market registered prices of €0/MWh between 10:00 and 17:00 on August 11.
The decrease in demand in most of the main European electricity markets, together with the increase in wind energy production in Germany and solar energy production in the Iberian Peninsula and France, contributed to lower prices in most markets, despite the increase in gas prices during the week. However, in the Italian market, the increase in gas prices combined with the decrease in wind production led to higher prices despite lower demand and a slight increase in solar energy production.
AleaSoft Energy Forecasting‘s price forecasts indicate that in the week of August 12, weekly prices will be lower than in the second week of August in the Iberian Peninsula, German and Italian markets, favored by lower demand and increased wind energy production in these markets, in addition to increased solar energy production in Germany. On the other hand, prices are expected to increase in the markets of France, Belgium, the United Kingdom and the Netherlands, favored by warmer temperatures and higher demand in the case of the markets of the United Kingdom and the Netherlands.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
In the week of August 5, Brent oil futures for the Front?Month in the ICE market remained stable compared to the previous week. On Monday, August 5, they continued the downward trend of recent days and registered the lowest settlement price of the week at $76.30/bbl. This is the lowest settlement price since January 8 of this year. Starting on Tuesday, August 6, prices recovered for four consecutive days to reach their weekly high of $79.66/bbl on Friday, August 9. According to data analyzed by AleaSoft Energy Forecasting, this value is 3.7% higher than the previous Friday. Still, the weekly average was 1.4% lower than the previous week.
On the first day of the second week of August, Brent oil prices continued the downward trend they ended the previous week on fears of a recession in the United States and declining demand for crude oil from China. However, fears of an escalation of conflict in North Africa and the Middle East, a 20% drop in production at Libya’s largest oilfield, Sharara, and recent US jobless claims data indicating that the US economy continues to grow, increased fears of a supply shortage and pushed Brent oil futures prices higher at the end of the week.
As for TTF gas futures in the ICE market for the Front?Month, in the second week of August they continued the upward trend experienced in the previous week, with a significant increase in prices. The weekly average settlement price was up 7.1% from the previous week. The lowest settlement price of the week of €35.50/MWh was registered on Monday, August 5. Thereafter, prices continued to rise each day, reaching a high of €40.40/MWh on Friday, August 9, the highest of the week and 10% higher than the previous Friday. According to data analyzed by AleaSoft Energy Forecasting, this is the highest settlement price since December 2, 2023.
The escalation of fighting between Ukraine and Russia in recent days near Ukrainian gas storage and supply facilities and Russian pipelines has raised concerns about possible gas supply reductions and outages to Europe through the region. In addition, Norwegian gas exports close to full capacity and low LNG import levels at European import terminals have contributed to this increase in gas prices.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they rose in almost all sessions in the second week of August. The weekly average of settlement prices was 0.6% higher than in the week of July 29. The settlement price of €68.73/t on Monday, August 5, was the lowest of the week, down 2.6% from the last session of the previous week. In the following days, prices continued to rise until Thursday, August 8, when the settlement price was €71.06/t. Although these prices initially followed gas prices, the Friday, August 9 settlement price fell to €70.14/t, 0.6% 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 European energy markets and energy storage
AleaSoft Energy Forecasting and AleaGreen provide short-, mid- and long?term market price forecasts for 28 European electricity markets: Austria, Belgium, France, Germany, Netherlands, Switzerland (EPEX SPOT), Bulgaria (IBEX), Czech Republic (OTE), Croatia (CROPEX), Denmark, Estonia, Finland, Latvia, Lithuania, Norway, Sweden (Nord Pool), Slovakia (OKTE), Slovenia (BSP Southpool), Spain, Portugal (MIBEL), Greece (HEnEX), Hungary (HUPX), Ireland (SEM), Italy (IPEX), Poland (POLPX), United Kingdom (N2EX), Romania (OPCOM) and Serbia (SEEPEX).
They also provide revenue calculation for batteries and hybrid systems of renewables and batteries using their system of hourly price curve simulations.
In August, they are promoting these forecasts, which use a scientific methodology based on Artificial Intelligence, time series and statistical models.
