European electricity market prices rise in the third week of October due to lower renewable energy production and higher demand.
In the third week of October, prices in the main European electricity markets remained at similar levels to those observed during the month. Most markets registered higher weekly averages than those of the previous week, due to the fall in wind and solar energy production and the increase in demand. CO2 futures prices also rose, as did gas futures prices, although to a lesser extent. Brent futures fell.
Solar photovoltaic and wind energy production
In the week of October 14, solar photovoltaic energy production increased in the Iberian Peninsula compared to the previous week. The Spanish market registered the largest increase, 11%, while the Portuguese market registered an increase of 5.2%. On this occasion, Portugal had an upward trend change, after five consecutive weeks of declines in production with this technology. This market, on Thursday, October 17, registered the second highest value of daily solar photovoltaic energy production for October, 14 GWh, after the production registered on the first day of this month.
On the other hand, the Italian, French and German markets registered declines from the previous week. The Italian market had the largest drop, 31%, while the German market registered the smallest decline, 2.9%. In France, the drop was 16%. The Italian market maintained its downward trend for the third consecutive week, while the French market repeated the same trend for the second week.
According to AleaSoft Energy Forecasting’s solar energy production forecasts, during the fourth week of October, solar energy production will increase in Germany and Spain, while it will continue to fall in 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 third week of October, wind energy production decreased in the main European markets compared to the previous week. The Italian market registered the largest drop, 50%, followed by the Portuguese and German markets, with decreases of 46% and 33%, respectively. The Spanish market fell by 15%, while the French market registered the smallest decline, 6.9%. This market maintained its downward trend for the third consecutive week.
For the week of October 14, AleaSoft Energy Forecasting’s wind energy production forecasts point to declines in production with this technology in all analyzed markets, continuing the trend of the previous week.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of October 14, electricity demand increased in most major European electricity markets compared to the previous week. The Dutch market registered the largest increase, 6.6%. In the British, Belgian, Spanish and Italian markets, demand registered increases ranging from 0.2% in Great Britain to 0.9% in Italy. In the British market, demand increased for the fifth consecutive week, while in the Belgian and Dutch markets it increased for the third and fourth week, respectively. In Italy, electricity demand continued its upward trend for the second week.
On the other hand, demand fell in the Portuguese, French and German markets. The Portuguese market registered the largest decrease, 3.2%, continuing the downward trend of the previous week. In Germany and France, electricity demand fell by 0.6% and 1.6%, respectively, registering a change in trend compared to the previous week.
Average temperatures increased in most analyzed markets. Italy, France, the Netherlands, Belgium and Great Britain registered increases ranging from 0.2 °C in Italy to 2.2 °C in Great Britain. On the other hand, Germany, Spain and Portugal registered decreases in average temperatures of 0.3 °C, 0.5 °C and 0.8 °C, respectively.
For the week of October 21, according to AleaSoft Energy Forecasting’s demand forecasts, demand will increase in the markets of Portugal, Italy, France, Germany and the Netherlands. However, it will decline in the markets of Great Britain, Belgium and Spain.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
In the third week of October, average prices in most major European electricity markets increased compared to the previous week. The exceptions were the N2EX market of the United Kingdom and the Nord Pool market of the Nordic countries, down 1.4% and 15%, respectively. The IPEX market of Italy registered the smallest percentage price increase, 8.6%. In contrast, the MIBEL market of Portugal registered the highest rise, 15%. In the rest of the markets analyzed at AleaSoft Energy Forecasting, prices rose between 9.0% in the Spanish market and 14% in the EPEX SPOT market of France.
In the third week of October, despite the price increases, weekly averages were below €81/MWh in most analyzed European electricity markets. The exceptions were the British and Italian markets, with averages of €95.55/MWh and €116.17/MWh, respectively. On the other hand, the Nordic market registered the lowest weekly average, €22.73/MWh. In the rest of the analyzed markets, prices ranged from €52.82/MWh in the French market to €80.03/MWh in the Dutch market.
Regarding hourly prices, despite the increases in weekly averages, on Sunday, October 20, most analyzed markets registered negative hourly prices, influenced by the usual decrease in demand on this day of the week and high values of renewable energy production in some cases. The exceptions were the Italian and Portuguese markets. The German, Belgian, Spanish, French, Dutch and Nordic markets registered negative hourly prices from 13:00 to 15:00. In the case of the British market, there was a negative price from 7:00 to 8:00. The German, Belgian, French and Dutch markets reached the lowest hourly price of the third week of October, ?€2.01/MWh, on Sunday, from 14:00 to 15:00.
During the week of October 14, the general decline in wind energy production led to higher prices in the European electricity markets. Falling solar energy production and increased demand in most markets also contributed to higher prices.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the fourth week of October, prices might continue to rise in most European electricity markets, influenced by the decline in wind energy production and increased demand in most markets.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
Brent oil futures for the Front?Month in the ICE market started the third week of October with price declines. Despite this, on Monday, October 14, they registered their weekly maximum settlement price, $77.46/bbl. Price declines continued in almost every session of the week. As a result, these futures reached their weekly minimum settlement price, $73.06/bbl, on Friday, October 18. According to data analyzed at AleaSoft Energy Forecasting, this price was 7.6% lower than the previous Friday and the lowest since October 1.
In the third week of October, concerns about demand evolution exerted their downward influence on Brent oil futures prices. During this same week, the International Energy Agency and the OPEC revised their demand growth forecasts. In both cases, forecasts for 2024 lowered, influenced by demand evolution in China. On the other hand, fears of supply disruptions due to the Middle East conflict diminished after Israel stated its intention not to attack Iranian oil facilities. However, the increased tension in the region might exert its upward influence on prices in the fourth week of October.
As for TTF gas futures in the ICE market for the Front?Month, on Monday, October 14, these futures registered their weekly maximum settlement price, €40.56/MWh, after rising by 1.7% compared to the settlement price of the previous Friday. According to data analyzed at AleaSoft Energy Forecasting, this price was the second highest so far in 2024. On Tuesday prices started a downward trend and for the rest of the week settlement prices were below €40/MWh. As a consequence of the price declines, on Friday, October 18, these futures reached their weekly minimum settlement price, €39.20/MWh. This price was 1.7% lower than the previous Friday. Despite the downward trend observed during the week, the settlement price average was 0.5% higher than the previous week.
In the third week of October, high levels of liquefied natural gas supply led to lower TTF gas futures prices. Forecasts of mild temperatures, which would cause a decline in demand, also contributed to this trend.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, on Monday, October 14, they reached their weekly maximum settlement price, €65.97/t, after rising by 2.1% from the previous Friday. According to data analyzed at AleaSoft Energy Forecasting, this price was the highest since September 28. However, in the rest of the week’s sessions, prices declined. As a result, on Friday, October 18, these futures registered their weekly minimum settlement price, €62.28/t, which was 3.6% lower than the previous Friday. Despite the declines registered during the week, the weekly average of the settlement prices was 1.8% above the previous week’s average.
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, batteries and hybridization
On Thursday, October 17, AleaSoft Energy Forecasting and AleaGreen held the 48th webinar of their monthly webinar series, featuring speakers from Deloitte for the fifth time. On this occasion, the webinar analyzed the evolution and prospects of European energy markets for the winter 2024?2025, the financing of renewable energy projects, the prospects for batteries and hybridization, as well as the importance of forecasting in audits and portfolio valuation. During the webinar, an IRR analysis of batteries using different price spread scenarios was presented, showing how batteries start to become profitable as their prices fall. This represents a turning point in the development of renewable energy, driven by hybridization with batteries.
On the other hand, the next webinar in the series will take place on November 14. The guest speaker will be Luis Marquina, President of AEPIBAL, the Business Association of Batteries and Energy Storage. In addition to the evolution and prospects of European energy markets for the winter 2024?2025, the webinar content will include the battery and hybridization projects at AleaSoft and the prospects for batteries, hybridization and energy storage.
