In the first week of October, TTF gas futures prices for the Front?Month rose, reaching the highest settlement price since early December, above €40/MWh, on Friday, October 4. Rising gas prices, together with declining renewable energy production and rising demand in most markets, boosted prices in most European electricity markets. Photovoltaic energy reached production records for October in the Iberian Peninsula and France. Brent futures prices rose while CO2 prices registered their lowest value since April 6.
Solar photovoltaic and wind energy production
In the week of September 30, solar photovoltaic energy production decreased in most major European electricity markets compared to the previous week. The German market registered the largest decline, 21%. The Italian and Portuguese markets had declines of 18% and 15%, respectively. In Portugal, production fell for the fourth week, while Germany repeated the trend for the second consecutive week. In contrast, in the French and Spanish markets, solar photovoltaic energy production increased by 8.3% and 5.6%, respectively, reversing the trend of the previous week.
During the week, the Iberian Peninsula and French markets registered historical records for daily solar photovoltaic energy production for October. Despite the decline in photovoltaic energy production in the Portuguese market during the week, on Tuesday, October 1, it registered its highest production for October, 15 GWh. The Spanish market generated 136 GWh on Friday, October 4, and the French market registered its record a day later, on Saturday, October 5, with 98 GWh of production with this technology.
In the week of October 7, according to AleaSoft Energy Forecasting’s solar energy production forecasts, solar photovoltaic energy production will increase in Germany, while it will decrease in Spain and Italy.
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 October, the main European markets registered a general decrease in wind energy production, changing the trend compared to the previous week. The German market showed the largest drop, 28%, followed by the Italian and French markets, which registered a drop of 18%. In Spain and Portugal, wind energy production fell by 14% and 10%, respectively.
In the second week of October, AleaSoft Energy Forecasting’s wind energy production forecasts indicate a recovery of wind energy production in the markets of the Iberian Peninsula, Germany and Italy. However, production with this technology will decline in the French market.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, Red Eléctrica and TERNA.
Electricity demand
During the week of September 30, electricity demand increased in most major European electricity markets compared to the previous week. The French and Portuguese markets registered the largest increases, 5.0% and 4.6%, respectively. The Spanish, British and Dutch markets registered increases ranging from 0.8% in Spain to 2.4% in the Netherlands. The Belgian market registered the smallest increase, 0.4%. In the case of the French and British markets, demand increased for the third consecutive week, while in the Dutch market it increased for the second week.
On the other hand, demand declined in the German and Italian markets by 2.6% and 0.6%, respectively. In Germany, the decline in demand was favored by the nationwide German Unity Day holiday on Thursday, October 3. In Italy, the market maintained its downward trend for the fifth consecutive week.
Average temperatures declined in most analyzed markets. Declines ranged from 0.1 °C in Great Britain to 3.7 °C in Germany. The exception was the Iberian Peninsula, where average temperatures rose by 0.9 °C in Portugal and 0.5 °C in Spain.
For the second week of October, according to AleaSoft Energy Forecasting’s demand forecasts, demand will grow in the markets of Great Britain, Germany, Belgium and Italy. However, it will decline in the markets of Portugal, Spain, France and the Netherlands.
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 October, average prices in most major European electricity markets increased compared to the previous week. The exception was the N2EX market of the United Kingdom, with a 2.0% drop. The IPEX market of Italy registered the smallest percentage price increase, 7.8%. In contrast, the Nord Pool market of the Nordic countries registered the highest percentage price rise, 107%. In the other markets analyzed at AleaSoft Energy Forecasting, prices rose between 8.9% in the EPEX SPOT market of the Netherlands and 63% in the EPEX SPOT market of France.
In the first week of October, weekly averages were above €70/MWh in most analyzed European electricity markets. The exceptions were the Nordic, French and Belgian markets, with averages of €39.60/MWh, €57.15/MWh and €64.87/MWh, respectively. The British and Italian markets registered the highest weekly averages, €92.43/MWh and €118.17/MWh, respectively. In the rest of the analyzed markets, prices ranged from €72.38/MWh in the German market to €76.08/MWh in the MIBEL market of Portugal.
Regarding hourly prices, despite the increases in the weekly averages, most analyzed markets registered negative prices in the first week of October. The exceptions were the British, Italian and Nordic markets. On Sunday, October 6, the German, Belgian, French and Dutch markets reached negative hourly prices from 13:00 to 15:00, while the Spanish and Portuguese markets, from 13:00 to 16:00. In the case of the French market, there were also negative prices on September 30, from 15:00 to 17:00. The registered price was the same in all cases, ?€0.01/MWh.
During the week of September 30, the increase in gas prices and the fall in wind energy production led to higher European electricity market prices. The increase in demand and the drop in solar energy production in most analyzed markets also contributed to the rise in prices.
AleaSoft Energy Forecasting’s price forecasts indicate that, in the second week of October, prices will fall in most European electricity markets, influenced by the increase in wind energy production.
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 registered their weekly minimum settlement price, $71.77/bbl, on Monday, September 30. Subsequently, prices increased. As a result, these futures reached their weekly maximum settlement price, $78.05/bbl, on Friday, October 4. According to data analyzed at AleaSoft Energy Forecasting, this price was 8.4% higher than the previous Friday and the highest since late August.
In the first week of October, Brent oil futures prices rose influenced by fears of supply disruptions due to the conflict in the Middle East. In the event of attacks on Iranian or Saudi oil infrastructures or the closure of the Strait of Hormuz, this would have consequences for global supply levels. However, during the week the recovery of production in Libya was announced and OPEC+ decided to maintain its production increases planned for the month of December.
As for the settlement prices of TTF gas futures in the ICE market for the Front?Month, during the first week of October they continued the upward trend of the previous week. However, on October 2, after a 1.7% drop compared to the previous day, these futures reached their weekly minimum settlement price, €38.62/MWh. In the rest of the sessions of the first week of October, prices increased. As a result, on Friday, October 4, these futures registered their weekly maximum settlement price, €40.98/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 7.5% higher than the previous Friday and the highest since December 2, 2023.
In the first week of October, the evolution of the Middle East conflict caused supply concerns. As a result, on Friday, October 4, the settlement price exceeded €40/MWh. However, European reserve levels remain high, limiting price increases.
Regarding CO2 emission allowance futures in the EEX market for the reference contract of December 2024, they registered a downward trend during the first week of October. On Monday, September 30, these futures reached their weekly maximum settlement price, €65.56/t. On the other hand, on Friday, October 4, they registered their weekly minimum settlement price, €62.05/t. According to data analyzed at AleaSoft Energy Forecasting, this price was 6.5% lower than the previous Friday and the lowest since April 6.
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 financing and valuation of renewable energy projects
The next webinar of AleaSoft Energy Forecasting and AleaGreen will take place on Thursday, October 17. It will be the 48th webinar in their monthly webinar series and will feature speakers from Deloitte for the fifth time. On this occasion, the content of the webinar will include 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 and the importance of forecasting in audits and portfolio valuation.
