December starts with the highest prices of the year for TTF gas and some European electricity markets.
In the first week of December, weekly prices in most major European electricity markets continued to exceed €100/MWh. During weekdays, prices were higher than in the previous week, with France, Italy and Belgium reaching their highest values of 2024 on the 4th. Over the weekend, prices fell. On December 2, TTF gas futures reached the highest settlement price since the end of October 2023. Photovoltaic and wind energy registered all?time production records for a December day in some markets. Demand increased in most markets.
Solar photovoltaic and wind energy production
In the week of December 2, solar photovoltaic energy production increased in the Iberian market compared to the previous week. The Portuguese market led the increases, reaching 6.4%, while in the Spanish market the rise was 0.8%. Both markets continued their upward trend, for the second and third consecutive week, respectively. In contrast, the Italian, French and German markets registered declines in generation with this technology. The Italian market registered the smallest drop, 10%, and continued its downward direction for the third week. The German market registered the largest drop, 47%, while the French market registered a 24% reduction.
During the week, the French, Spanish and Portuguese markets set all?time records for solar photovoltaic energy production for a day in December. The French and Spanish markets reached their highest values on December 4 and 5, with 44 GWh and 87 GWh, respectively. The Portuguese market registered its highest value on Sunday, December 8, reaching 11 GWh of solar photovoltaic energy production. On the other hand, the Italian market reached its second highest value for a day in December on Monday, December 2, with 42 GWh of generation. The German market also reached its second highest value of generation with this technology for a day in December on Thursday, December 5, with 66 GWh, after the value registered on Sunday, December 1, which was 79 GWh.
For the second week of December, AleaSoft Energy Forecasting’s solar energy production forecasts indicate increases in the German and Italian markets. On the other hand, photovoltaic energy production will decrease in the Spanish market.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
In the first week of December, wind energy production increased in the Iberian and French markets compared to the previous week. The Spanish market registered the highest increase, 69%, while the Portuguese market showed the lowest growth, 8.2%. The French market registered an increase of 50%. On the other hand, the Italian and German markets registered declines in wind energy generation for the second consecutive week. On this occasion, the Italian market registered a decrease of 3.5% and the German market a decrease of 7.5%.
The French market registered the highest value of wind energy production for a December day in history, on Saturday 7, with 409 GWh. Likewise, the Italian market reached its second highest value of wind energy production in December, on Sunday, December 8, with 162 GWh.
For the week of December 9, AleaSoft Energy Forecasting’s wind energy production forecasts indicate a general decrease in production with this technology in the main European electricity markets compared to the previous week.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Electricity demand
During the first week of December, electricity demand grew in most major electricity markets in Europe compared to the previous week. The French market led the increases with 5.5%, while the British market registered the smallest increase, 0.4%. The markets of the Netherlands, Germany, Belgium, Portugal and Italy showed increases ranging from 0.6% in the Dutch market to 3.0% in the Italian market. In Italy, demand rose for the fifth consecutive week. In contrast, in the Spanish market, demand decreased by 1.7% after four weeks of increases. In this market, the national holiday on Friday, December 6, Spanish Constitution Day, contributed to the decline in demand.
Average temperatures decreased in all analyzed markets compared to the previous week. Italy led this general decline with a decrease of 2.0 °C, while Spain registered the smallest reduction, 0.3 °C. Belgium, Great Britain, Portugal, the Netherlands, France and Germany showed decreases ranging from 0.4 °C in Belgium to 1.6 °C in Germany.
For the second week of December, AleaSoft Energy Forecasting’s demand forecasts indicate an increase in electricity demand in all major European markets as average temperatures will continue to fall in most markets.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica, TERNA, National Grid and ELIA.
European electricity markets
In the first week of December, prices in the main European electricity markets showed a heterogeneous evolution. During weekdays, prices were generally higher than those of the previous week, while during the weekend they tended to be lower. As a result, weekly prices remained at similar levels to the previous week, with most markets registering higher averages. Price increases ranged from 4.6% in the EPEX SPOT market of Belgium to 12% in the EPEX SPOT market of Germany. In terms of declines, the MIBEL market of Spain and Portugal reached the largest percentage price drop compared to the previous week, 16%. The EPEX SPOT market of France and the N2EX market of the United Kingdom also registered declines, 2.2% and 4.5%, respectively.
In the week of December 2, weekly averages continued to exceed €100/MWh in most analyzed European electricity markets. The exceptions were the Nord Pool market of the Nordic countries and the French market, which registered the lowest averages, €45.48/MWh and €95.58/MWh, respectively. The IPEX market of Italy reached the highest weekly average, €147.07/MWh. In the rest of the analyzed markets, prices ranged from €104.10/MWh in the Spanish market to €114.12/MWh in the German market.
Regarding daily prices, most analyzed markets registered their highest prices of the week on December 4. On that day, the Italian market reached its highest daily price since October 17, 2023, while the Belgian and French markets reached their highest prices since the beginning of December 2023.
In the week of December 2, the increase in weekly gas prices, the increase in electricity demand and the fall in wind and solar energy production led to higher weekly prices in some European electricity markets. In contrast, the increase in wind energy production in the Iberian Peninsula and France, the increase in solar energy production in Spain and Portugal, as well as the decrease in demand in the Spanish market, contributed to the fall in prices in these markets.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the second week of December, prices will increase in most European electricity markets, influenced by the fall in wind energy production and the increase in demand. In the Spanish market, solar energy production will also decline.
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 began the first week of December with price declines. However, after a 2.5% increase from the previous day, on Tuesday, December 3, these futures reached their weekly maximum settlement price, $73.62/bbl. Subsequently, prices declined and on Friday, December 6, these futures registered their weekly minimum settlement price, $71.12/bbl. According to data analyzed at AleaSoft Energy Forecasting, this price was 2.5% lower than the previous Friday and the lowest since November 16.
In the first week of December, concerns about the evolution of demand continued. Thus, despite the tension in the Middle East and OPEC+’s decision to maintain its production cuts, in most sessions of the first week of December, Brent oil futures registered price declines.
As for TTF gas futures in the ICE market for the Front?Month, they started the first week of December with price increases. On Monday, December 2, these futures reached their weekly maximum settlement price, €48.66/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was the highest since October 31, 2023. Subsequently, prices started a downward trend. As a result, on Friday, December 6, these futures registered their weekly minimum settlement price, €46.48/MWh. This price was 2.8% lower than the previous Friday.
Forecasts of cold temperatures and concerns about Russian gas supplies favored TTF gas futures to reach the maximum price on Monday, December 2. However, abundant supplies of liquefied natural gas contributed to the price decline during the first week of December.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they started the first week of December with a slight price increase compared to the last session of the previous week. Thus, on Monday, December 2, these futures reached their weekly maximum settlement price, €68.83/t. Subsequently, prices declined and on Thursday, December 5, these futures registered their weekly minimum settlement price, €67.34/t. According to data analyzed at AleaSoft Energy Forecasting, this price was the lowest since November 14. On Friday, December 6, prices were up 1.4% from Thursday. The settlement price was €68.31/t, 0.1% 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 and the energy transition
The 50th webinar of AleaSoft Energy Forecasting’s monthly webinar series will take place on Thursday, December 12. This webinar will coincide with the fifth anniversary of the series and will feature speakers from PwC Spain, Deloitte and EY. The webinar will include a summary of the evolution of the electricity market in the last five years. In addition, it will analyze the prospects for the next five years and some of the main vectors of the energy transition, such as renewable energies, batteries, demand, green hydrogen and other renewable fuels.
