October 2023

Market Analysis

Spot and short-term contracts:

National demand increased throughout October by 1.3%, in comparison to October last year (2022). 50.7% of total energy produced in October came from renewable production and generated 25.5% (10.609 GWh) more than last year. Only wind energy production increased by 15.4% set against October 2022. Besides, 69.8% of the total energy produced in October came from non-CO2 emission.

The Spanish electricity market experienced significant price volatility during October. There was a large contrast between the highest value reached 141 €/MWh and the lowest of 5 €/MWh. The average price declined to 86 €/MWh from 103 €/MWh in September. In terms of m-o-m comparison, September-October had a 16% decrease. The reduction of the annual inflation on the eurozone might have had an impact on m-o-m decrease, from 4.9% to 2.9%, respectively. Furthermore, as described below [PH6] gas price increased m-o-m, showing the strength of the impact coming from renewable generation sources.

As shown in figure 1, the highest price reached in October was like the values registered in January 2023, the same applies to the lowest value of the month. Below, we see the average, maximum, and smallest price is depleted, including m-o-m flows in percentage.

The general insight of the daily values reached per month in 2023 (Figure 2) shows an overall increase during the last quarter of year. Despite the hints of an increasing trend of the average price in the end of September, October lowered the average price to 83 €/MWh. Nevertheless, the monthly distribution was wider during October in comparison to previous months, and October’s monthly median stayed above 100 €/MWh. Larger volatility was seen on energy price during October due to couple of incidents: OPEC (Organization of the Petroleum Exporting Countries) reached limits and diminished its spare capacity; Israel-Hamas conflict which altered the rise of oil prices a 7% within the same week. These are important causes for energy prices to rise, including the increase of national power demand [PH5].

Total electricity demand in Spain amounted from 19.7 TWh in September to 19.8 TWh in October. With regards to power generation typology, the technologies with the highest participation in the mix in October were nuclear 18%, CCGTs 19%, and wind 28%. All the power generation technologies remained at similar levels as September, with only wind (11%) and hydraulic (3%) power generation higher than the previous month.

[PH1] The LCOE (Levelized Cost of Electricity) of renewable generation technologies has experienced a potent drop, pushing forward the process of energy transition. In terms of investment, this downward trend encourages investors to increase its implementation. Renewable energy production generated 50.71% of the total energy production of the month, higher in comparison with the 42.1% of renewable generated during September. This slight increase seems to be influenced by the increase of wind power generation in October. In turn, this type of generation has been pushed by the weather conditions (storms) that occurred in Spain in the last weeks of October.

As for the Spanish gas market (MIBGAS), a slight increase was seen in the average price for October, at 42.2 €/MWh compared to 36.4 €/MWh registered in September, with the highest price of 51.3 €/MWh compared to September’s at 42.5 €/MWh. At the end of October, the European gas storage was filled up to 99.31% of capacity and Spain an estimation of 100.42% was given.

Regarding CO2 emissions, the EUA Spot contract decreased from 82.2 €/t in September to 80.9 €/t in October. This is described as a cause of a weakened manufacturing sector in the Eurozone, concerning a decrease in EUA demand.

In the case of oil, Brent prices increased from 80.4 $/bbl  in September to 88.5 $/bbl. In addition to the mentioned above [PH4], the effects of a decrease of production in Saudi Arabia and Russia these months made the highest price to reach 92.38$/bbl on the 19th of October.

 

Medium and long-term contracts:

With regards to electricity futures (OMIP), during October prices fluctuated more than in September. The estimation of energy price for Q124 in October expressed a higher average value of 115.99 €/MWh, compared to the previous month of 113.8 €/MWh. In the case of Q224, prices are towards a mean value of 96.91 €/MWh.

Cal’24 contract prices showed a consistent increase in comparison to September, reaching 115.91 €/MWh compared to 108.3 €/MWh in September. Moreover, Cal’25 prices rose during October and reached 93 €/MWh from the 84.1 €/MWh reached in September.

In the case of MIBGas contracts, futures were traded at 50.95 €/MWh in October increasing from 42 €/MWh in September on last forecast for Q423. As for Cal’24, the contract closed the month at an average price of 50.2 €/MWh, increasing from 49.3 €/MWh in September. Concerning future gas prices, the awareness of the provision due to the labor conflicts in Australian plants are still present, with renewed strikes reviving the risk of gas supply. Regarding supply from Norway, once the maintenance period was over, it at once affected the gas price in Europe. However, gas prices were mainly altered due to the conflict of Israel-Hamas, since Egypt uses Israeli gas, to meet domestic demand and to export partially to Europe. Even though it is only a small proportion, it is still a threat for energy markets because it can affect the transport of crude oil and LNG through Persian Gulf.

To conclude with CO2, EUADec’23, Dec’24, and Dec’25 contracts showed a slight decrease and closed October with an average price of around €81.5/t, €85.5/t, and €89.3/t, respectively. It is expected that prices will be far from where CO2 EU ETS were initially estimated for 2025. A yearly 4.3% decrease from 2024-2027 will drop out the market supply. In addition, a new European Commission will be in place by the end of 2024, probably carrying changes and increasing ambiguity regarding this CO2 EU ETS market until then. A revision of the ETS directive was launched by the European commission with the idea of improving market monitoring. Relevant to energy and ETS, new amendments related to the transparency and the integrity of the carbon market were introduced, including obligation to register in the Union register of bilateral emissions allowance transactions.

SP Baseload Power price (€/MWh)

SP Peak load Power price (€/MWh)

EUA price (€/t)

MIBGas 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)

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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

Conseil en investissement

« 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

PDG