FR Base Power price (€/MWh)

  • Base Cal21
  • Base Cal22
  • Base Q220
  • Base Q320
  • Base Q420
  • Base Q121

EUA price (€/t)

  • Cal20
  • Cal21
  • Cal22

Coal Price ($/Tn)

  • Cal21
  • Cal22
  • Q220
  • Q320
  • Q420
  • Q121

Clean Spark Spread – Base (€/MWh)

  • Base Cal21
  • Base Cal22
  • Base Q220
  • Base Q320
  • Base Q420
  • Base Q121

Clean Dark Spread – Base (€/MWh)

  • Base Cal21
  • Base Cal22
  • Base Q220
  • Base Q320
  • Base Q420
  • Base Q121

FR Peak Power price (€/MWh)

  • Peak Cal21
  • Peak Cal22
  • Peak Q220
  • Peak Q320
  • Peak Q420
  • Peak Q121

PEGN Gas price (€/MWh)

  • Cal21
  • Cal22
  • Q220
  • Q320
  • Q420
  • Q121

Gas vs. Coal Price (€/MWh)

  • Gas + CO2 - Cal21
  • Coal + CO2 - Cal21
  • Gas + CO2 - Cal22
  • Coal + CO2 - Cal22

Clean Spark Spread – Peak (€/MWh)

  • Peak Cal21
  • Peak Cal22
  • Peak Q220
  • Peak Q320
  • Peak Q420
  • Peak Q121

Clean Dark Spread – Peak (€/MWh)

  • Peak Cal21
  • Peak Cal22
  • Peak Q220
  • Peak Q320
  • Peak Q420
  • Peak Q121

Market Analysis – August 2020

Prompt and month-ahead contracts:

FRA electricity consumption averaged 48.6GW at the max in Aug20, down by 2.8GW m-o-m.  This decrease was brought about by a slowdown of the economic activity which resulted from the combination of the summer holiday period and a significant increase of new cases of the coronavirus pandemic.

On the supply side, nuclear power generation was quite stable, up by just 0.2GW at the max. It´s worth noting that, as is normal during this time of the year, a number of nuclear reactors had to be taken off the grid: Chooz 1 & 2 (1.5GW each) in order to guarantee water supply to Belgian users coming from the nearby Meuse river, and Golfech 2 (1.3GW), due to an increase in temperature of the Garonne river. For its part, gas power production remained stable, set at an average 3.9GW at the max. In terms of renewables, though both wind and solar output were just slightly on the down, the largest decrease was observed in hydro power generation, down by an average 1.2GW m-o-m.

As for gas prices, TTF spot contract, which had closed at EUR4.937/MWh on Powernext on Jul 31st, continued the bullish trend observed in Jul20, though to a much higher extent, and eventually closed at EUR9.545/MWh on Aug 31st. Reasons for this increase could be summarized as follows: 1) reduced NOR gas flows due to planned maintenance works at several gas fields; 2) steady increase in Asian LNG prices (first time since end of Jan20 that JKM index rose above the $4.00/mmBtu mark); 3) high demand for storage injections; 4) lower than expected renewable power output and, 5) FRA nuclear power outage extensions which caused an increase in CO2 prices.

In terms of spot power prices, FRA power baseload contract, which had closed at EUR41.41/MWh on the EEX on Fri, Jul 31st, added on average EUR3.34 (+10%) after closing at EUR54.31/MWh on Mon, Aug 31st. Despite slightly lower consumption levels, the recovery in gas prices, coupled with nuclear power outages and rather low renewables output all added to this rather bullish behaviour. Its equivalent peak load contract closed at EUR64.86/MWh, up by approx. EUR3.50.

Re. month-ahead contracts, FRA Sep20 power baseload contract traded slightly sideways, torn between expectations of increased economic activity after the summer holiday period and news of outbreaks of the coronavirus across Europe. This resulted in the contract adding just 66cts after closing at EUR44.83/MWh on the EEX. By contrast, its equivalent Oct20 contract was down by EUR1.20 after closing at EUR47.48/MWh.

Medium and long-term contracts:

Despite increases observed in both gas and oil prices, contracts on FRA power curve were namely influenced by falling emissions and coal prices. FRA Cal21 power baseload contract closed at EUR47.20/MWh on the EEX, down by an average 66cts m-o-m, whereas its equivalent Cal22 contract shed an average 86cts after closing at EUR47.70/MWh. As for quarterly contracts, FRA Q420 power baseload contract closed at EUR56.80/MWh, down by an average EUR1.25 m-o-m. By contrast, its equivalent Q120 contract closed at EUR58.73/MWh, up by an average 51cts.

In terms of underlying fuel costs, TTF Cal21 gas contract, which had closed at EUR11.950/MWh on Powernext on Jul 31st, followed a slightly upward trend supported by: 1) a rise in gas spot and LNG contracts; 2) higher oil prices (note that Brent Oct20 delivery contract added on average $1.53 after closing at $45.05/bbl on the ICE on Aug 31st); 3) high level of demand from gas storage operators and, 4) expectations of a global economy recovery in the longer run. As a result, TTF Cal21 contract closed at EUR13.952/MWh, up by an average 45cts m-o-m.

As for coal prices, API2 Cal21 contract, which had closed at $59.80/Tn on the ICE on Jul 31st, lost ground w-o-w during the period under analysis. The absence of physical coal demand, with stock levels in Europe relatively high, both at ports and at power plants, and fears that the coronavirus pandemic may weaken physical demand even stronger, were the main reasons behind this bearish trend. However, the contract rebounded during the last days of Aug20, in line with higher gas and emissions prices. In all, API2 Cal21 contract was down by an average $2.33 after closing at $57.71/Tn.

Finally, re. emission prices, EUA Dec21 contract, which had closed at EUR26.64/Tn on the EEX on Jul 31st, traded sideways during the period under analysis. The bullish effect prompted by expectations of reduced auction supply during the month in question, rising temperatures which stimulated power demand for cooling, and news, during the last days Aug20, that EDF had extended maintenance work at two nuclear power plants, was nevertheless offset by a weak level of market activity and fears of a second coronavirus wave in Europe. As a result, EUA Cal21 contract was down by an average 67cts m-o-m after closing at EUR29.02/Tn..

Mica Sternhagen