In the third week of September, prices in European electricity markets fell compared to the previous week. This drop was due to lower demand and a significant increase in wind power production in several markets, which counterbalanced the increase in gas and CO2 prices. On September 25, TTF gas futures reached the highest value since early April and on the 18th Brent recorded the highest closing price since November 2022.
Solar photovoltaic and thermoelectric production and wind power output
In the week of September 18, solar production decreased in almost all markets analyzed compared to the previous week. The German market recorded the largest drop of 22%. The other markets where solar production decreased were France, down 2.0%, and Italy, down 18%. The exception to this trend was the Iberian Peninsula, where there was a 12% increase week-on-week. In addition, on Sunday, September 24, the Spanish market saw the highest solar thermal production since the beginning of September, with 22 GWh generated, and on Wednesday, September 20, the second highest photovoltaic production in the same period was recorded, with 126 GWh generated. The Portuguese market also generated 13.8 GWh of PV power on September 23, the highest value since the end of August.
For the week of September 25, according to AleaSoft Energy Forecasting's solar production forecasts, an increase is expected in all the markets analyzed.
As for wind production, the week of September 18 saw a week-on-week increase in most of the markets analyzed by AleaSoft Energy Forecasting. The largest increase, of 295%, was recorded in the Italian market, followed by 210% in the German market. The smallest increase, 28%, was recorded in the Spanish market. The exception was the Portuguese market with a 38% drop in wind power production.
During the third week of September, daily wind production reached levels not seen since spring or summer in several markets. In Spain, for example, 290 GWh were generated with this technology on September 21, which is the highest value since May this year. In the German market, 653 GWh were generated on September 19, which is the highest wind power production in this market since the second week of August. Likewise, one day later, on September 20, 191 GWh were generated in the French market, a level not reached since August 6.
For the week of September 25, AleaSoft Energy Forecasting forecasts indicate that wind power production will decrease in all the markets analyzed.
For the week of September 18, electricity demand decreased from the previous week in all markets analyzed. The largest drop, of 9.2%, was observed in the Netherlands market, followed by the Spanish market, where the decline was 5.1%. The smallest drop was recorded in Germany and was 0.3%. In the other markets analyzed, the fall in demand ranged from 1.8% in Belgium to 4.2% in Portugal.
During the same period, average temperatures fell in all the markets analyzed compared to the previous week. The smallest decrease was recorded in Italy, which was 0.3 °C. In the rest of the markets analyzed, average temperatures decreased from 1.5 ºC in Portugal to 3.4 ºC in France.
For the week of September 25, according to AleaSoft Energy Forecasting's demand forecasts, electricity demand is expected to continue to fall in most of the European markets analyzed, with the exception of France and the Iberian Peninsula.
European electricity markets
In the week of September 18, prices in all European electricity markets analyzed in AleaSoft Energy Forecasting declined from the previous week. The largest drop, 87%, was achieved in the Nordic Nord Pool market, while the smallest decline, 1.5%, was recorded in Portugal's MIBEL market. Elsewhere, prices fell between 4.2% in the Spanish market and 31% in the EPEX SPOT market in Germany, Belgium and the Netherlands.
In the third week of September, weekly averages were below E100/MWh in almost all European electricity markets. The exceptions were the Portuguese market and Italy's IPEX market, which reached E102.26/MWh and E118.27/MWh, respectively. On the other hand, the lowest average price of E2.62/MWh was that of the Nordic market. In the rest of the markets analyzed, prices ranged from E68.42/MWh in the French market to E99.43/MWh in the Spanish market.
With regard to hourly prices, negative prices were recorded on September 19, 20 and 24 in the German, Belgian, French and Dutch markets. In the Nordic market, in addition to these days, negative hourly prices were recorded on September 21, 25 and 26. Likewise, the Nord Pool market price on the 19th was below zero, averaging ?0.60 E/MWh. In the case of the British market, negative hourly prices were recorded on September 19, 20 and 25. The lowest hourly price of ?5.74 E/MWh was reached on the German market on September 19, from 14:00 to 15:00. This price was the lowest since the first half of August in this market.
On the other hand, in the Spanish market, on Sunday, September 24, from 12:00 to 16:00, the price was 0 E/MWh. In the Italian market, on that day, from 13:00 to 15:00, a price of 10.00 E/MWh was recorded, the lowest since May.
During the week of September 18, despite the increase in the average price of gas and CO2 emission allowances, the general decline in electricity demand and the significant increase in wind power production in most of the markets analyzed led to a fall in prices in the European electricity markets.
AleaSoft Energy Forecasting 's price forecasts indicate that in the fourth week of September, European electricity market prices could increase, influenced by the decrease in wind power production, as well as by increases in demand in some markets.
Brent, fuels and CO2
In the third week of September, the closing prices of Brent crude oil futures for Front-month on the ICE market remained above $93/bbl. The weekly low closing price of 93.27 $/bbl was recorded on Friday, September 22 and was 0.7% lower than the previous Friday. On the other hand, the weekly high closing price of $94.43/bbl was reached on Monday, September 18. This price was 4.2% higher than the previous Monday and the highest since the first half of November 2022.
In the third week of September, production cuts by Saudi Arabia and Russia led to closing prices for Brent oil futures reaching values above $93/bbl. However, concerns about economic developments and expectations of higher interest rates for longer exerted a downward influence on prices, contributing to their decline during the week.
As for TTF gas futures on the ICE market for the Front-month, on Monday, September 18, they recorded a closing price of 34.47 E/MWh, 3.8% lower than on the previous Monday. However, as of Tuesday, September 19, prices started to increase. This upward trend continued on Monday, September 25, when a closing price of 44.44 E/MWh was reached. This price was 29% higher than on Monday, September 18 and the highest since the beginning of April.
In the third week of September, the approach of the colder months led to an increase in TTF gas futures prices, despite the high levels of European reserves. Disruptions in the flow of gas from Norway, which will extend into October, also exerted an upward influence on prices. Meanwhile, the labor dispute at Australian liquefied natural gas exporting plants continues.
As for CO2 emission allowance futures on the EEX market for the December 2023 benchmark contract, on Monday, September 18, the weekly low closing price of E80.84/t was recorded. This price was 1.0% lower than the previous Monday and the lowest since early June. However, during the rest of the sessions of the third week of September, prices increased. As a result, the maximum weekly closing price of E85.48/tonne was reached on Friday, September 22 and was 3.9% higher than the previous Friday.
AleaSoft Energy Forecasting's analysis of the outlook for energy markets in Europe and the financing and valuation of renewable projects.
The next webinar in AleaSoft Energy Forecasting and AleaGreen's monthly webinar series will be held on Thursday, October 19. The webinar will feature speakers from Deloitte for the fourth time. In addition to the outlook for the European energy markets for the winter 2023?2024, the financing of renewable energy projects and the importance of forecasts in audits and portfolio valuation will be discussed.