In the fourth week of August, prices declined in most European markets, supported by increased wind energy production coupled with decreases in demand and average temperatures. The exception was the Iberian market, where prices remained above €90/MWh for most of the week, with lower solar energy production in Spain and Portugal, and wind energy in the case of Portugal. TTF gas futures prices remained stable, below €40/MWh.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of August 19, solar energy production decreased in most major European electricity markets compared to the previous week. The Portuguese and Spanish markets showed the largest declines, 3.4% and 3.3%, respectively, continuing the downward trend for the second consecutive week. On the other hand, the German market registered declines for the third week, this time with the smallest drop, 1.9%. On the other hand, in the French and Italian markets, solar energy production increased by 14% and 3.3%, respectively.
In the week of August 26, AleaSoft Energy Forecasting’s solar energy production forecasts show increases in Germany. On the other hand, forecasts indicate that solar energy production will continue to decline in Spain and Italy.
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 August 19, wind energy production increased in most major European markets compared to the previous week. The German market registered the largest increase, 161%, followed by the French and Italian markets, with increases of 76% and 21%, respectively. The Spanish market registered the smallest increase, 2.3%. The French and Spanish markets maintained their upward trend for the second consecutive week. The only exception was the Portuguese market, where wind energy production decreased by 15%.
On the other hand, over the weekend, daily wind energy production reached values not registered for a long time. On Friday, August 23, the German market generated 622 GWh using this technology, a value not seen since mid?April. On Saturday, August 24, the French market generated 181 GWh, the highest daily production since June 15. On Sunday, August 25, the Spanish market registered 188 GWh, the highest production since July 15.
In the week of August 26, AleaSoft Energy Forecasting’s wind energy production forecasts show decreases in Germany, France and the Iberian Peninsula. The exception will be the Italian market, where wind energy production will continue to increase.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of August 19, electricity demand in the main European electricity markets behaved heterogeneously compared to the previous week. In countries where August 15 was a public holiday, due to the celebration of the Assumption of the Virgin Mary, electricity demand increased. The Spanish market registered the largest increase, 6.0%, and the Italian market had an increase of 3.4%. Meanwhile, demand in the Belgian and French markets increased by 1.4% and 1.3%, respectively. The Portuguese market was the exception, as demand continued to fall for the fourth consecutive week, this time by 0.9%, despite a recovery in demand following the August 15 holiday.
In the rest of the markets, demand declined, reversing the upward trend of the previous week. The Dutch market registered the largest drop, 8.6%, and the British market registered a 4.1% decline. The German market registered the smallest decline in demand, this time by 0.1%.
During the fourth week of August, average temperatures fell in all analyzed countries. The drops ranged from 3.3 °C in Germany to 0.4 °C in Spain.
For the week of August 26, according to AleaSoft Energy Forecasting’s demand forecasts, changes in demand will continue to be heterogeneous. Demand will increase in the markets of Germany, France, Spain and Italy, while it will decrease in the markets of Portugal, Belgium, 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 fourth week of August, prices in the main European electricity markets fell compared to the previous week. The exception was the MIBEL market of Spain and Portugal, with increases of 0.7% and 1.0%, respectively. On the other hand, the IPEX market of Italy registered the smallest decline, 5.3%. On the other hand, the Nord Pool market of the Nordic countries registered the largest percentage drop in prices, 65%. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices fell between 29% in the N2EX market of the United Kingdom and 39% in the EPEX SPOT market of the Netherlands.
In the fourth week of August, weekly averages were below €65/MWh in most analyzed European electricity markets. The Spanish, Portuguese and Italian markets were the exceptions, with averages of €82.34/MWh, €82.60/MWh and €123.31/MWh, respectively. On the other hand, the Nordic market registered the lowest weekly average, €7.42/MWh. In the rest of the analyzed markets, prices ranged from €43.45/MWh in the French market to €60.97/MWh in the German market.
Regarding hourly prices, most analyzed European markets registered negative prices on Sunday, August 25. The exception was the Italian market, which did not register any negative prices in the fourth week of August. In contrast, the British market also reached negative prices on August 21, 22 and 23. In the case of the German, Belgian, French, Dutch and Nordic markets, in addition to those days, they had negative prices on August 24. On the other hand, the Dutch market registered the lowest hourly price of the fourth week of August, ?€44.92/MWh, on Saturday, August 24, from 14:00 to 15:00.
During the week of August 19, the fall in the weekly average gas price and the increase in wind energy production in most analyzed markets led to the fall in European electricity market prices. Solar energy production also increased in the French and Italian markets, and electricity demand fell in the German, British and Dutch markets. In contrast, the decline in wind and solar energy production in the Iberian Peninsula contributed to the increase in prices in the MIBEL market. In addition, demand increased in the Spanish market.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the last week of August, prices might increase in the analyzed European markets. The fall in wind energy production and the increase in demand in most analyzed electricity markets will contribute to this behavior.
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 $78/bbl for most of the fourth week of August. On Wednesday, August 21, these futures registered their weekly minimum settlement price, $76.05/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since January 3. Subsequently, prices increased. On Friday, August 23, these futures reached their weekly maximum settlement price, $79.02/bbl. But this price was still 0.8% lower than the previous Friday.
In the fourth week of August, concerns about the evolution of the global economy exerted a downward influence on the prices of these futures. In addition, negotiations for a cease?fire in Gaza reduced fears about the impact of the conflict on supply. However, expectations of interest rate cuts in the United States pushed prices higher at the end of the week. Increased tension in the Middle East over the weekend might also exert its upward influence on Brent oil futures prices in the last week of August.
As for TTF gas futures in the ICE market for the Front?Month, during the fourth week of August, settlement prices continued below €40/MWh. On Monday, August 19, they reached their weekly maximum settlement price, €39.84/MWh. In the following sessions, prices declined. On Thursday, August 22, these futures registered their weekly minimum settlement price, €36.59/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since August 6. In contrast, on Friday, August 23, the settlement price increased slightly to €36.86/MWh. Despite the increase, this price was 7.0% lower than the previous Friday.
High European reserve levels exerted their downward influence on TTF gas futures prices in the fourth week of August. In addition, fears about the effects of the worsening conflict between Russia and Ukraine on supply eased, contributing to the price decline. However, planned maintenance works in Norway will affect supply from this country, which might exert an upward influence on prices in the coming weeks.
Regarding settlement prices of CO2 emission allowance futures in the EEX market for the reference contract of December 2024, during the fourth week of August, they remained above €70/t. On Monday, August 19, these futures registered their weekly maximum settlement price, €73.14/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 0.9% higher than the previous Friday and the highest since early June. Subsequently, settlement prices declined. As a result, on Friday, August 23, these futures reached their weekly minimum settlement price, €71.12/t. This price was 1.9% 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 in Europe
AleaSoft Energy Forecasting and AleaGreen provide long?term price curve forecasting reports for electricity markets. Long?term price forecasts are necessary for renewable energy project financing, risk management and hedging, PPA negotiation, portfolio valuation and audits, long?term energy trading and other uses related to renewable energy development. Price forecasts of AleaSoft Energy Forecasting and AleaGreen have hourly granularity, 30?year horizons and confidence bands. In addition, these forecasts are based on a unique scientific methodology.
