In the penultimate week of 2024, prices in the main European electricity markets fell, after several weeks of increases. This fall was favored by increased wind energy production and lower electricity demand, associated with cooler temperatures. In addition, solar photovoltaic energy production increased in several markets, and again broke records for a December day in Spain, Portugal and Italy. Gas and CO2 futures rose during the week, although their weekly average price was lower than the previous week.
Solar photovoltaic and wind energy production
In the week of December 16, solar photovoltaic energy production increased in most of the major European electricity markets compared to the previous week. The German market recorded the largest increase of 54%, while the Spanish market experienced the smallest increase of 8.7%. The Italian and French markets recorded growth of 17% and 13%, respectively. The Spanish market recorded increases for the fifth consecutive week, while the Italian market continued its upward trend for the second week in a row. On the other hand, the Portuguese market recorded a drop of 2.9%.
During the week, the Spanish, Portuguese and Italian markets reached all-time records for solar photovoltaic production for a given day in December. The Spanish market recorded the highest production for a single day of December on Sunday, December 22, with 96 GWh, beating the previous record of 90 GWh on the 10th. In Portugal, the record was reached on Saturday, December 21, with 13 GWh, beating the previous record recorded on Monday, December 9, of 12 GWh. On the other hand, the Italian market recorded its highest value for a day in December on Saturday, December 21, with 47 GWh of photovoltaic generation.
For the week of December 23, AleaSoft Energy Forecasting‘s solar energy production forecasts show an increased production compared to the previous week in the German, Italian and Spanish markets.
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 December, wind energy production increased in all major European markets, following declines in the previous week. The German market recorded the largest increase, up by 118%, followed by increases in the Portuguese market, up 87%, and the French market, up 81%. The Italian and Spanish markets recorded the lowest growth rates, up 52% and 44%, respectively.
For the fourth week of December, AleaSoft Energy Forecasting‘s wind energy production forecasts show decreases in wind energy production in most of the main European electricity markets compared to the previous week, with the exception of the Italian market.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
In the week of December 16, electricity demand decreased in all the main European electricity markets compared to the previous week, experiencing a trend reversal after the previous week’s increases, except for the Italian market, which continued its downward trend. The Dutch market recorded the largest drop of 12%, followed by the British market, which declined by 9.5%. The Belgian, Italian, German and French markets recorded declines ranging from 2.9% in Belgium to 7.5% in France. The Iberian Peninsula recorded the smallest declines, of 1.8% and 0.5% in the Spanish and Portuguese markets, respectively.
Average temperatures increased in most of the analyzed markets. Belgium showed the largest increase in average temperatures, at 4.6 °C, while Great Britain had the smallest increase, at 2.0 °C. France, Germany, and the Netherlands recorded increases ranging from 3.0 °C in France to 4.3 °C in Germany. On this occasion, on the Iberian Peninsula, average temperatures increased by 2.2 °C in Portugal and 2.1 °C in Spain. In Italy, temperatures remained similar to the previous week.
For the fourth week of December, AleaSoft Energy Forecasting‘s demand forecasts indicate decreases in electricity demand in all analyzed European markets, due to reduced work activity during the Christmas celebrations.
Source: Prepared by AleaSoft Energy Forecasting using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
European electricity markets
During the penultimate week of the year, prices in European electricity markets experienced significant declines, driven by increased wind energy production and reduced demand associated with the recovery of temperatures.
Germany’s EPEX SPOT market led the price declines, with the weekly average price down 71% from the previous week. It was followed by other EPEX SPOT markets, such as the Netherlands, down 63%, Belgium, down 59%, and France, down 53%. The UK N2EX market and the Nordic Nord Pool market recorded declines of 56% and 48%, respectively.
In Southern Europe, the declines were less pronounced. Italy’s IPEX market recorded a decline of 21%, while Spain and Portugal’s MIBEL market showed a drop of 19%.
In the third week of December, the average price in the main European markets was around €60/MWh. However, the Mediterranean countries recorded highest values, with the Italian market reaching a weekly average of €120.45/MWh, followed by the Spanish and Portuguese markets, with prices just a few cents below €100/MWh. At the other extreme, the Nordic market recorded a weekly average of only €23.47/MWh.
The highest daily prices were recorded on Tuesday, December 17. On that day, the Italian market reached a daily average of €135.72/MWh, while the Iberian market followed with €121.85/MWh. The highest hourly prices were observed between Monday, December 16 and Tuesday, December 17, depending on the market, with the Italian market leading with a peak of €179.18/MWh during three hours on Tuesday.
Looking ahead to the last week of the year, AleaSoft Energy Forecasting‘s price forecasts anticipate a significant price rebound in central and Northern European markets, due to a significant reduction in wind energy production. In contrast, in the more Northern markets, the trend shows to a possible decrease in prices.
Source: Prepared by AleaSoft Energy Forecasting using data from OMIE, EPEX SPOT, Nord Pool and GME.
Brent, fuels and CO2
During the penultimate week of the year, Brent oil futures for the Front?Month in the ICE market registered a clear downward trend, closing on Friday, December 20 at $72.94 per barrel, 2.1% lower than the last price of the preceding week.
The most recent economic data from China revealed signs of a slowdown in its economy, with retail sales growth in November below expectations. This slowdown in consumption in the world’s largest oil importer raised concerns about a possible slowdown in global crude oil demand. In addition, the International Energy Agency forecasts point to a possible surplus in the oil market by 2025 due to the expected increase in production in non-OPEC+ countries.
On the other hand, TTF gas futures in the ICE market for the Front?Month registered an upward trend during the week and closed on Friday 20 at €44.13/MWh, 7.1% higher than the last price of the previous week. However, the weekly average of closing prices was 3.9% lower than the previous week.
Despite the volatility of gas prices in the short term, the medium-term trend continues to be clearly upward since hitting lows below €25/MWh in February. The uncertainty created by the end of the supply contract from Russia via Ukraine at the end of the year and the decline in gas reserves, which are at much lower levels than last year due to the lower temperatures recorded this winter, are putting upward pressure on prices.
CO2 emission allowance futures in the EEX market for the December 2025 benchmark contract recorded a turnaround during the week and managed to end at €68.20 per ton, up 1.7% from the last price of the previous week. This price behavior remained quite correlated with the evolution of gas prices, as usual in this market. As in the case of gas, despite the upward trend of closing prices during the week, their weekly average was lower than that of the previous week.
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
On Thursday, December 12, AleaSoft Energy Forecasting held the last webinar of the 2020?2024 five?year period, the 50th webinar in its monthly webinar series with the topic “Turning point: from the five-year period of photovoltaic energy to the five-year period of batteries”. The special event, which also commemorated the fifth anniversary of the webinar series, featured speakers from Deloitte, EY and PwC Spain.
The webinar analyzed the evolution of the electricity market in the last five years and the prospects for the next five years, with a special focus on the main vectors of the energy transition, such as renewable energies, batteries, demand, green hydrogen and other renewable fuels.
This content was presented in two complementary sessions. In the English session, statistical data were presented together with the usual review of the evolution of the energy markets, and in the Spanish session, an analysis table was held with the speakers.
