Demand and generation mix evolution:
In January 2024, electricity consumption in France during maxima averaged 70.4 GW, up by 6.6 GW compared to December levels and a 1,6 GW compared to January 2023 (68.8 GW). Despite the winter forecasts being relatively mild and the impact of vacation period of January, power demand has increased. The peak power demand was reached on Wednesday the 10th of January, at 83.5 GW, more than 10GW above December’s 73.4 GW. In line with this increase in demand, French spot power prices in January increased rapidly after vacation and then fell, stabilising the second half of the month at levels well above December ones.
Looking at the overall power generation picture, we see from RTE data (the French national grid operator) that nuclear generation averaged 49.2 GW at the maxima, more than 5 GW above December and more than 9 GW above November’s figures.
Wind power generation was lower in January than in December and in November.
For gas, the share in the power generation mix was relatively high (above 10%) during weeks 2 and 3, while being below 5 % during week 1 (vacation) and week 4.
Finally, France was a net exporter of electricity, especially during week 1 and week 4, frequently well over 15 GW.
Focusing on renewable generation, the there was a 1GW increase in the average during max in January with respect to December and November, reaching 30.1GW. Despite a decrease in wind from 11.3GW to 9.9GW, renewable generation increased because solar power output during maxima increased from 4.7GW to 5.4GW and hydro increased from 13.1 to 14.6GW. Hydro stocks, in line with historical trends, decreased in January but closed the month at a level well-above the same time last year (2 146 GWh in week 4 versus last year’s 1 861 GWh).
Prompt and month-ahead contracts:
As for gas prices, TTF spot contract closed at 29.61 €/MWh in January: virtually the same price as December’s closing 29.93 €/MWh, and much lower with respect to end of November’s 41.23 €/MWh, attributable in part to the relatively low energy demand during the coldest part of the winter and in part to the very high gas reserves. Although the instability in the Red Sea pointed out in our December monthly analysis did have a bullish impact on energy prices, the continent’s gas reserves remain very high, and Europe finds sufficient imports from the Norway and the USA. It must not be forgotten that the major increase in prices observed in 2023 was in Summer (they rose more than 40% following strikes in Australian LNG terminals).
Oil month ahead prices steadily increased all month until Friday 26th, rising from 75.9 $/bbl to 83.6 $/bbl, before taking a decreasing trend which led them to fall back down to 77;3 $/bbl by the 2nd of February. So far month-ahead contracts have evolved slightly below the World Bank’s forecast of 81 $/bbl for 2024.
French power prices fluctuated slightly less strongly in January than in December, also due to wind generation being lower. French peak spot power prices in December fluctuated between 2.05 – 153.07 €/MWh, while in January the stayed within the narrower range of 49.86 – 122.70 €/MWh. Note that average monthly peak power prices, after having decreased in December, increased in January, from an average of 71.45 €/MWh to one of 87.33 €/MWh, the main reason being that December was anomalously low because of a conjuncture of low consumption due to holidays and high wind power generation which had repeatedly brought prices towards 0.
As for power futures, March 2024 contract was on a decreasing trend, going from 80.60 €/MWh on January the 2nd to 61.46 €/MWh on January the 22nd, before increasing only partially back to 69.28 €/MWh on the 31st.
Medium and long-term contracts:
TTF Cal25 contract, after a 20% fall in December, stayed relatively stable in January, going from 31.41 €/MWh on the 2nd to 33.52 €/MWh on the 31st. Bearish forces include enough regasification units operational in Europe to satisfy GNL demand and a limited impact of Red Sea tensions in a context where Europe can rely on alternative suppliers for gas, especially Norway and also the U.S.A, which have forecasted increased fossil fuel extraction in coming years. To take note : the United Nations Environment Program (UNEP) in its December 2023 Production Gap Report has shown that the strategies of the 20 largest fossil fuel producers, representing 82% of global extraction, all the while promising zero-emission program (17 of 20) have continued to subsidize the expansion of fossil fuel extraction.
Coal prices saw a bump-curve, with API Cal25 prices initially rising in January, going from 93.82 $/t on the 2nd to 102.84 $/t on the 16th, before falling to 96.99 $/t on the 31st.
EUA Dec’24 prices fell by more than 15 % going from 75.96 €/t to 64.17 €/t.
French Cal25 power contract continued its overall downward trend, falling further in January from 88.06 €/MWh on the 2nd to 74.75 €/MWh on the 22nd, before picking up only partially and closing the month at 79.52 €/MWh. Increased confidence in French nuclear capacity following the “grand carénage” as well as trust in gas storage and transport networks from south-west to north-east following this winter’s performance are contributing factors.
FR Baseload Power price (€/MWh)
FR Peak load Power price (€/MWh)
EUA price (€/t)
PEG Gas price (€/MWh)
Coal Price ($/Tn)
Gas efficiency:52%; Coal efficiency: 38%
Gas vs. Coal Price (€/MWh)
Gas efficiency: 52%; Coal efficiency: 38%