FR Base Power price (€/MWh)

  • Base Cal19
  • Base Cal20
  • Base Cal21
  • Base Q319
  • Base Q419

EUA price (€/t)

  • Cal18
  • Cal19
  • Cal20
  • Cal21

Coal Price ($/Tn)

  • Cal19
  • Cal20
  • Cal21
  • Q319
  • Q419

Clean Spark Spread – Base (€/MWh)

  • Base Cal19
  • Base Cal20
  • Base Cal21
  • Base Q319
  • Base Q419

Clean Dark Spread – Base (€/MWh)

  • Base Cal19
  • Base Cal20
  • Base Cal21
  • Base Q319
  • Base Q419

FR Peak Power price (€/MWh)

  • Peak Cal19
  • Peak Cal20
  • Peak Cal21
  • Peak Q319
  • Peak Q419

PEGN Gas price (€/MWh)

  • Cal19
  • Cal20
  • Cal21
  • Q319
  • Q419

Gas vs. Coal Price (€/MWh)

  • Gas + CO2 - Cal19
  • Coal + CO2 - Cal19
  • Gas + CO2 - Cal20
  • Coal + CO2 - Cal20
  • Gas + CO2 - Cal21
  • Coal + CO2 - Cal21

Clean Spark Spread – Peak (€/MWh)

  • Peak Cal19
  • Peak Cal20
  • Peak Cal21
  • Peak Q319
  • Peak Q419

Clean Dark Spread – Peak (€/MWh)

  • Peak Cal19
  • Peak Cal20
  • Peak Cal21
  • Peak Q319
  • Peak Q419

Comments: 

Prompt and month-ahead contracts:

FRA power prompt context saw consumption levels decrease by approx. 2GW to an average 51.5GW at the max on the back of warm weather.

In terms of supply, nuclear power generation decreased by 1.5GW to an average 43.2GW at the max, whereas gas power production remained quite stable, set at an average 3.4GW at the max. In terms of renewables, hydro power output, though still quite strong, didn´t experience major changes. By contrast, a slight increase was observed re. wind and solar power generation, up by an average 0.5GW in both cases.

As for gas prices, TTF spot contract, which had closed at EUR12.65/MWh on Powernext on Wed, May 22nd, followed an overall bearish trend on the back of: 1) weak gas demand due to mild weather; 2) comfortable gas pipeline supply from RUS and NOR despite an unplanned outage at the NOR Gulfaks production site and, 3) a busy LNG delivery schedule at NWE regas terminals. As a result, the contract closed at EUR12.48/MWh on Wed, May 29th, down by just 18cts since our previous analysis.In all, the combination of lower demand levels due to warm temperatures and reduced gas and coal-fired power production – thanks to renewable assets generation increasing their share in the generation mix –, resulted in FRA power baseload contract averaging EUR34.33/MWh (down by almost EUR6.00 since our previous analysis) after closing at EUR37.49/MWh on the EPEX on Wed, May 29th. Its equivalent peak closed at EUR40.76/MWh and averaged EUR35.51/MWh, down by EUR6.85.

Re. month-ahead contracts, FRA Jun19 power baseload contract, which had closed at EUR37.21/MWh on the EEX on Wed, May 22nd, followed a downward trend supported by bearish prompt fundamentals and falling clean fuel costs, together with prospects of a comfortable LNG supply scenario in the weeks to come. As a result, the contract closed at EUR36.07/MWh, down by EUR1.14, whereas its equivalent Jul19 contract shed just 37cts after closing at EUR39.52/MWh.

Medium and long-term contracts:

FRA Cal20 power baseload contract, which had closed at EUR52.15/MWh on the EEX on Wed, May 22nd, lost some ground during the period under analysis, namely due to lower coal and EUA prices. The contract closed at EUR51.78/MWh on Wed, May 29th, down by 37cts, whereas its equivalent Cal21 contract added 49cts after closing at EUR48.75/MWh. Quarterly contracts under analysis were both bearish, though, with FRA Q319 power baseload contract closing at EUR41.55/MWh, down by 88cts, and its equivalent Q419 contract shedding 78cts after closing at EUR60.40/MWh.

Gas: TTF Cal20 contract, which had closed at EUR19.05/MWh on Powernext on Wed, May 22nd, traded slightly sideways during the period under analysis. On the downside, 1) a bearish gas prompt scenario; 2) thin trading activity due to several Bank Holidays in NWE during wk 22; 3) lower EUA prices and, 4)  overall falling oil prices (with Brent Jul19 delivery contract shedding a total $1.54/bbl after closing at $66.40/bbl on Wed, May 29th as the impact of commercial tensions between the US and China plus the increase in US crude inventories managed to outweigh that of US sanctions on Iran and Venezuela and OPEC productions cuts) all weighed on the contract. However, strong technical supports and looming concerns over Groningen gas site production cuts likely being brought forward to Oct19 in the aftermath of an earthquake in the region last week gave a boost to gas prices during the first half of wk 22. As a result, TTF Cal20 contract closed at EUR19.13/MWh on Wed, May 29th, up by a mere 7cts.

Coal: API2 Cal20 contract, which had closed at $68.80/Tn on the ICE on Wed, May 22nd, continued the downward trend observed during our previous analysis on the back of sluggish coal demand in Asia, plus high inventories and falling coal-fired generation in Europe with renewable power production increasing their share in the power mix. The contract eventually closed at $66.40/Tn, down by an overall $2.40.

Re. emissions, EUA Dec19 contract, which had closed at EUR26.37/Tn on the EEX on Wed, May 22nd, followed a rather slightly downward trend on the back of an overall weaker energy complex and the resignation last Friday of UK Prime Minister Theresa May, leading to fears of hardliners taking the lead of future Brexit negotiations, perceived as bearish for EUAs prices as it increases again the risk of a hard Brexit. Note, however, that from Fri, May 25th onwards, EUA Dec19 contract wouldn´t move much away from the EUR25.50/Tn mark, a technical signal raising the prospects of a sudden price move shortly. Eventually, the contract closed at EUR25.52/Tn, down by 85cts since our previous analysis. Its equivalent Cal20 contract was down by a similar amount after closing at EUR25.77/MWh.

As for margins, with rather stable gas prices, both coal and EUA contracts on the down, and peak power prices trading sideways for the various contracts under analysis, most relevant peak Clean Spreads have been: 1) CSS: Q418, down 24cts to EUR28.98/MWh; Q120, up 37cts to EUR27.41/MWh; Cal20, down 12cts to EUR17.61/MWh, and Cal21, up 22cts to EUR16.66/MWh; 2) CDS: Q120, up EUR1.86 to EUR29.02/MWh, and Cal21, up EUR1.56 to EUR14.07/MWh.

Mica Sternhagen