Spot and short-term contracts:

With lingering uncertainties surrounding the possible changes and implementation of the European Commission’s proposed electricity market reform, and with China’s energy consumption continuing to grow (more than 3.5% in Q1 2023 compared to the same quarter in 2022), markets are reacting to this context with mixed signals. Some commodities, which had seen a steady decline in their prices, have seen their trend changed, while some others have remained stable. The end of the summer and the arrival of the winter season will be crucial in setting the tone for the coming months.

In terms of prices, the Spanish electricity market experienced a high volatility in April, but still slightly lower than in the previous month. The maximum price reached was over 114 €/MWh, while the minimum was around 16 €/MWh. This volatility was the result of a high share of renewables in the monthly generation mix. The average electricity price was 73.73 €/MWh, down 18% compared to March and also lower (-62%) compared to the same month last year, when the market experienced a price spike following the outbreak of the Ukrainian conflict.

In gross terms, electricity demand in March totalled 17.7 TWh, down 14% m-o-m. This figure represents a 9.7% reduction compared to the same month last year, bringing the daily average to over 590 GWh.

On the generation side, the technologies with the largest presence in the monthly generation mix were wind, nuclear and solar (22.5%, 21.7% and 16.9%, respectively). The former saw its share fall by 5.4% m-o-m, although it remained the largest source of generation. Despite the significant presence of renewables last month, the share of renewables vs. non-renewables decreased slightly from 53%-47% in March to 52%-48% in April. In terms of installed capacity, there was no difference compared to last month.

As for the Spanish gas market (MIBGAS), a decrease in prices was observed compared to the previous month. The monthly average spot price for gas in April was 37.9 €/MWh, a decrease of 13% m-o-m, continuing the downward trend already observed in February and March, and resulting in the «Iberian Exception» mechanism not being applied during the whole month.

In terms of emissions, EUA Dec23 contract reached an average price of 92.7 €/t on the EEX in March, an increase of 1% m-o-m.

In the case of oil, an increase in Brent prices was observed last month (after several months of a downward trend), with Brent Jun’23 contract reaching an average value of $83.26/bbl.

Medium and long-term contracts:

As regards electricity futures (OMIP), some products saw their prices increase while others lost some ground compared to the previous month. By way of example, quarterly contracts fell by around 2% when compared to their March values. On the other hand, Cal’24 and Cal’25 prices rose by an average 3% m-o-m. The month ended with values below 120 €/MWh for Q3 and 132 €/MWh for Q4 2023, while Cal 2024 closed the month at 105.4 €/MWh.

Following the trend of the last few months, we have seen MIBGas prices stop their downward trend. Futures for Q3 are down by almost 6%, with prices around 50 €/MWh. Average MIBGas prices for Q3 2023 were around 42 €/MWh, while Q4 traded slightly higher, averaging 49.3 €/MWh and showing an increase of 3% m-o-m. As for Cal’24, the contract closed the month at an average price of 52.13 €/MWh which, in this case, represents an increase of more than 7% compared to March 2023.

However, despite the fall in prices seen in recent months, it is worth bearing in mind that a total cut in Russian gas supplies to the EU is still a possibility and, if we add to this the recovery and sustained increase in Chinese demand (and the resulting uncertainties regarding the availability of gas for next winter), prices could be seriously affected and we could end up facing a radically different scenario.

Finally, EUA futures prices consistently showed a steady upward trend over the last month. EUADec’23, Dec’24 and Dec’25 contracts increased by 1% compared to March, and closed the month at around €93/t, €97/t and €102/t, respectively.