FR Baseload Power price (€/MWh)

FR Peak load Power price (€/MWh)

EUA price (€/t)

PEGN Gas price (€/MWh)

Coal Price ($/Tn)

Gas efficiency:52%; Coal efficiency: 38% 

Gas vs. Coal Price (€/MWh)

Gas efficiency: 52%; Coal efficiency: 38%

Clean Spark Spread – Baseload (€/MWh)

Clean Spark Spread – Peak load (€/MWh)

Clean Dark Spread – Baseload (€/MWh)

Clean Dark Spread – Peak load (€/MWh)

August 2022

Market Analysis

Electricity and gas markets, neither helped by gas supply tensions, nuclear production concerns, nor heatwaves, have experienced a sharp rise in prices over the summer months while Europe is reportedly considering reforming the market.

Prompt and month-ahead contracts:

In France, the heatwave that took place during this summer affected the nuclear fleet because of the high temperature forecast of the rivers, such as the Rhône.

As a result, production has been low. However, EDF is maintaining its production forecasts for this year and the coming winter but indicates that production will probably be in the low range, specifying that no new hard hits should occur to reach this prevision.

It should be noted that thirty-two French nuclear reactors are shut down for scheduled maintenance or due to corrosion issues that were not anticipated. A situation that strongly displeases the French government with just a few months left for the winter period to start. Prime Minister Elisabeth Borne asked EDF on Thursday, September 1st to stick to its nuclear reactor maintenance schedule so as to avoid having to restart a coal-fired power plant and facing the risk of electricity shortages this winter: « I really count on EDF to guarantee its restart program in the coming weeks, in the coming months, and that would prevent us from having to restart a coal plant, » she stated.

In terms of demand, August saw consumption decrease by an additional average of 2.8GW at the max.

As for generation, nuclear power output averaged 27.2GW at the max, down by 1GW m-o-m and down by 15GW when compared to the same month last year! In August, even though the French nuclear fleet had its pitfalls, a few days with higher-than-expected production levels have been observed, especially at the beginning of the second week and at the end of the third week of August. As for fossil-fueled production, gas generation was down by an average 0.4GW at the max, whereas coal power output was rather stable. Regarding renewables, solar output was l down by 0.5GW m-o-m but with many production peaks at the beginning of the month (10.8GW on August 2nd). As for wind power, production was just slightly higher, up by 0.2GW m-o-m, with many production peaks observed at the beginning of the month, too (7.6GW on August 2nd). Hydro output, however, was down by an average 1.3GW at the max.

Throughout the month, spot power prices continued to reflect the gas market´s behavior with significant volatility (with a standard deviation of c. EUR132.8/MWh).

After starting off at an average price of EUR403/MWh in the first week, with a new heatwave boosting demand and balancing out a stable output in renewable energy generation, spot electricity prices in Europe went down during the second week due to high renewable power output. The French spot contract fell to an average EUR375/MWh.

The second half of the month was marked by a very significant increase in spot prices (average of EUR486/MWh in the third week of August) supported by rising gas prices and strengthening demand after a public holiday and forecasts pointing to a drop in wind power.

The situation continued to deteriorate in a context of low renewables production and concerns regarding gas supplies to Europe, which faced a shutdown of gas deliveries through the Nord Stream 1 pipeline. As a result, the last week of August saw power spot prices averag EUR709,75/MWh with a peak of EUR743,84/MWh registered on August 31st. Overall, the French power spot contract added on average EUR91.62/MWh m-o-m.

Gas prices remained high due to fears that Russia would further reduce supplies to the rest of Europe following Gazprom’s statement that economic sanctions made it impossible to have a Siemens manufactured gas turbine returned (at the time located in Canada) necessary to pump gas through the NS1 pipeline, adding that the overhaul and maintenance of turbines required for the full operation of the NS1 pipeline was being impeded by incomplete documents on Germany’s part. Prices were stable during the first two weeks of the month (averaging EUR196.84/MWh) before rising to an average of c. EUR300/MWh (EUR296.16/MWh) during the last week, with a peak of EUR312.73/MWh on August 30th.

At the beginning of the month, European coal spot prices remained stable compared to the previous month, at around USD254.23/Tn in the two first weeks of the month. However, from August 15th, prices started to rise sharply, reaching USD325.75/Tn on August 25th and an average price of USD304.57/Tn at the end of the month. The main reasons for this increase were: 1) the EU ban on Russian coal imports finally taking effect on August 10th and, 2) increased German coal-fired plant demand at a time when the main rivers used to transport coal saw water levels decrease significantly, hence resulting in a reduction of coal volumes being transported.

On the other hand, Brent contract for delivery in October saw prices being maintained at a high level due, to a certain extent, by the International Energy Agency’s forecast for this year’s growth in oil demand as some consumers are switching to oil due to rising natural gas prices, even if oil prices are still very high. The contract closed the month at EUR99.31/MWh, down by an average USD3.08/bbl m-o-m.

Medium and long-term contracts:

At the beginning of the month, the French Cal23 electricity contract saw prices increase slightly (averaging EUR522.52/MWh in the first week of August), tracking stronger long-term natural gas prices, bullish coal prices and persistent corrosion issues leading to frequent outages of nuclear reactors.

This increase continued throughout the month amid forecasts of strong demand for power generation.

At the end of the month, the situation worsened fueled by fears that the EU might not be able to meet its gas storage target ahead of the winter season. Both French and German Cal23 power contracts saw prices increase significantly, with the French contract reaching a new record high of EUR1130/MWh on August 26th.

Nevertheless, on the next trading day (August 29th), Cal23 electricity contracts fell due to reports that high gas storage levels were already being reached. Thus, prices for the French Cal23 contract ended 18.6% lower, at EUR920/MWh. On August 30th, prices decreased sharply in France and Germany, tracking lower long-term gas prices as the market anticipated that Brussels’ plan to decouple gas and electricity prices in meeting scheduled to take place on September 9th would have a bearish effect on prices. Thus, the French Cal23 contract ended 22.8% lower, at EUR710/MWh. Its equivalent German contract settled 19.7% lower, at EUR610.03/MWh.

Eventually, t French Cal23 power baseload product closed the month at EUR670.52/MWh, adding on average EUR224.11/MWh m-o-m. Its equivalent Cal24 contract added an average EUR111.39/MWh.

French Q422 and Q123 baseload contracts, which started off the month at EUR854.53/MWh and EUR919.91/MWh, respectively, increased steadily, reaching new record high of EUR1659.88/MWh and EUR1908.51/MWh on August 30th, and adding on average EUR225.27/MWh and EUR320.07/MWh!

On the gas front, long-term gas prices remained high on the back of lingering concerns regarding gas supply via the Nord Stream 1 pipeline. TTF Cal23 contract started off the month at EUR157.42/MWh, only to progressively increase and reach a new record high of EUR310.6/MWh on August 26th.

By COB of August 31st, TTF Cal23 contract had averaged EUR210.04/MWh, adding c. EUR74.01/MWh m-o-m.

As for the oil market, concerns that a recession (as poor Chinese economic data fueled fears of a worldwide recession, for example) could affect fuel demand tempered prices, which were pushed up following the IEA´s latest growth forecast and Saudi Arabia’s suggestion that output from OPEC+ be cut to sustain prices should Iranian petroleum return to the market. As a result, Brent crude oil closed the month at USD96.49/bbl.

On the emissions front, EUA Dec22 contract prices overall followed the trend set by other commodities in the context of increased coal-fired power generation. The contract saw prices increase and reach a new record high of EUR98.01/Tn on August 19th. The last three days of the month, however, saw the EUA Dec22 contract lose more than EUR10/Tn as news broke that the EC was planning to reform to European Wholesale Markets. Eventually, the contract averaged EUR87.74/Tn, adding c. EUR6.03 /Tn m-o-m.

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Expérience professionnelle

Céline, jeune active dynamique, a fait ses premiers pas dans le monde du travail dans le domaine du tourisme en tant que community manager au Loups du Gévaudan, en Lozère. En rejoignant l’équipe HES en novembre 2021, elle a souhaité diversifier ses connaissances : se former dans le secteur énergétique, se spécialiser dans les stratégies marketing afin de développer les relations clients de l’entreprise ; tout en approfondissant ses compétences en coordination et gestion de projets.

Formation

Céline est diplômée d’une double licence Espagnole – Anglais en Langue, Littérature et Civilisation Etrangère à la Sorbonne IV (2018). Elle a aussi obtenu un Master II en Direction de Projets ou Etablissements Culturel, spécialité Tourisme International. Elle a également étudié à l’étranger, à University of London (Angleterre) et Universidad de Morón (Argentine).

Céline Haya Sauvage

Responsable Marketing

DSC_0323
« La décarbonisation des secteurs de l’énergie et des transports est sans doute aujourd’hui le principal moteur économique de l’industrie. »

Expérience professionnelle

Il a débuté sa carrière dans le génie civil en tant que chef de projet en France, en Martinique et en Australie. Par la suite, il devient directeur général d’une filiale au Venezuela. En 1992, il crée une filale pour Dalkia en Allemagne (chauffage urbain, cogénération et partenariats) et représente Véolia en Thaïlande. En 2000, il a ouvert le bureau commercial d’Endesa en France pour profiter de la libéralisation du marché de détail. A partir de 2006, en tant que responsable du développement chez Endesa France, il a dirigé le plan d’Endesa pour la production à cycle combiné gaz en France et a simultanément développé le portefeuille éolien et photovoltaïque de la Snet. Philippe Boulanger a ensuite travaillé pendant 3 ans au siège d’E.ON pour coordonner les activités de l’entreprise en France. Il a été fortement impliqué dans le projet français de renouvellement de la concession hydroélectrique. En tant que Senior Vice President – Project Director chez Solvay Energy Services d’avril 2012 à février 2014, il était en charge des projets de déploiement H2/Power to gas et d’accès direct au marché européen. Philippe est un expert pour HES depuis 2014.

Formation

Philippe Boulanger est ingénieur diplômé de l’Ecole Polytechnique et de l’Ecole Nationale des Ponts & Chaussées (France) et possède une expérience combinée de plus de 25 ans en énergie et infrastructures. En plus de l’anglais, M. Boulanger parle couramment le français, l’allemand et l’espagnol.

Philippe Boulanger

Electricity Expert

HES-Philippe-Boulanger
« Le monde est en train de changer. De nouveaux investisseurs accordent une attention particulière au secteur de l’énergie alors que les acteurs historiques adaptent leur position sur le marché. »

Expérience professionnelle

Antonio a commencé sa carrière dans le secteur de l’électricité en 1991 en tant que membre de l’équipe du directeur général de Sevillana de Electricidad (Espagne). En 1997, il était responsable de la réglementation commerciale chez Endesa Distribution. En 2000, il rejoint le département M&A européen d’Endesa. Il a été nommé CEO d’Endesa Power Trading Ltd en 2003. En 2004, il devient Directeur de la gestion de l’énergie de la SNET (France) et en 2008, il est nommé Directeur Général de cette société. En 2009, il a occupé le poste de Directeur du Développement Entreprise d’E.ON France. En 2011, il a fondé Haya Energy Solutions (HES), une société de conseil qui aide les entreprises à optimiser leur chaîne de valeur : de la définition de la stratégie aux opérations quotidiennes, en s’appuyant sur une solide expérience et une bonne compréhension de l’industrie de l’énergie. De 2015 à 2018, Antonio a été Président de Celest qui opère 2 CCGT françaises (420MW chacune), détenues par KKR. Fin 2018, il rejoint Asterion Industrial Partners, un fonds d’investissement dédié aux infrastructures, en tant que partenaire opérationnel.

Formation

Ingénieur industriel de l’Ecole Supérieure d’Ingénieurs de Séville (Espagne) et titulaire d’un MBA de Deusto (Espagne).

Antonio Haya

CEO