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)

April 2022

Market Analysis

Prompt and month-ahead contracts:

Despite a rather cold start, the month of April saw FRA electricity demand average c. 55.9GW at the max, down by a further 7.2GW m-o-m, on the back of overall milder temperatures and reduced consumption during the Easter holiday break.

In terms of generation, nuclear power output averaged 31GW at the max, down by 5.67GW m-o-m and c. 7.6GW when compared to the same month last year, putting the reliability of FRA´s nuclear fleet into question once again (and exacerbated further by EDF´s announcement that it had found signs of possible corrosion issues on the auxiliary circuits of four of its nuclear reactors totalling 4.8GW). As for fossil-fuelled production, gas generation was down by an average 1.7GW at the max, whereas coal output was rather stable. Regarding renewables, no major changes were observed in terms of hydro and wind power production. However, solar power generation, though up by an average of just 1GW at the max m-o-m, showed rather healthy values during wk8 and reached a new all-time high of 9.7GW at the max on Tue, Apr 24th

As for gas prices, TTF spot contract reversed the overall trend observed during our previous analysis. In fact, after starting April on a bullish note supported by a short-lived cold snap, the contract gradually lost ground namely on the back of forecasts pointing to milder weather conditions and prospects of healthy LNG cargo deliveries into Europe. The bullish impact resulting from news that RUS had stopped gas supply to Poland and Bulgaria on Wed, Apr 27th (on the grounds both countries refused to pay for gas supplies in rubbles), was equally short-lived, with TTF spot contract adding EUR7.83/MWh d-o-d and retreating thereafter. Eventually, the contract was down by an average EUR26.841 m-o-m after closing at EUR96.432/MWh on Powernext on Sat, Apr 30th.

FRA spot power prices were also seen following an overall downward trend in April. Milder temperatures, especially during the last week of the month, decreasing gas prices and EUAs contracts keeping below the EUR80.00/Tn mark during the first half of the month, all weighted on the contract. The only significant bullish move was observed on Mon, Apr 4th, with FRA power baseload contract settling at EUR551.43/MWh (+74% when compared to Fri, Apr 1st) on the back of very cold temperatures (demand registered 71.6GW at the max) and nuclear power generation reaching no more than 32.1GW at the max (with 27 out of 56 nuclear reactors out of service). By COB of Sat, Apr 30th, FRA power baseload contract was down by an average EUR61.99 m-o-m after closing at EUR200.93/MWh. Its equivalent peak load contract closed at EUR191.74/MWh, down by EUR71.40.

Regarding month-ahead contracts, FRA May’22 power baseload contract was down by an average EUR62.72 m-o-m after closing at EUR212.60/MWh on the EEX on Fri, Apr 29th. Despite some reduced NOR gas pipeline supply (due to maintenance outages) and lower flows from RUS, plus RUS having cut flows to Poland and Bulgaria, a milder weather outlook and strong LNG supply into Europe managed to bring power prices down. It´s worth noting here that LNG prices for delivery into Europe are at their largest discount to TTF gas prices (c. EUR29.00/MWh against almost zero 2.5 years ago). Lingering concerns that RUS might cut gas pipeline supply to more European countries and a slowdown in China´s demand for LNG due to newly decreed confinements has led to a glut in cargoes waiting to be discharged at European ports in the context of very tight slots availability. As a result, cargo owners are forced to offer discounts to deliver their supply to those buyers that have managed to contract regassification slots. For its part, FRA Jun’22 power baseload contract closed at EUR222.13/MWh, down by an average EUR56.38 m-o-m.

Medium and long-term contracts:

FRA power curve contracts were mostly on the up, supported by the impact current geopolitical tensions and, more specifically, resulting measures being proposed by the EU (such as an EU-wide full embargo on RUS energy exports) are having on the whole energy complex. To this we should also add ongoing concerns regarding the reliability of FRA´s nuclear power fleet. Although EDF is confident it will be able to return c. 20GW capacity to the grid for the coming winter, the market deems this news as unreliable and unrealistic given the ongoing issues the French nuclear fleet keeps facing. Nor does it help that France´s recently re-elected President Macron, in a bid to attract both pro-nuclear and pro-renewables voters, had promised, amongst others, to 1) develop nuclear, solar and wind generation assets more than ever, and 2) make France “the first major nation to abandon gas, oil and coal”. Even if these pre-election promises were to be fulfilled, it will take time to do so, and time is something the FRA power system cannot afford under the current circumstances.

In light of the above, it comes as no surprise that FRA Q422 power baseload contract was up by an average EUR11.31/MWh when compared to March, whereas both FRA Cal23 and Cal24 power baseload contracts added on average EUR34.51/MWh and EUR35.03/MWh m-o-m, respectively.

In terms of underlying fuel costs, TTF Cal23 gas contract added an average EUR7.432 m-o-m after closing at EUR78.770/MWh on Powernext on Fri, Apr 29th. Though still bullish, the level of prices observed was not as high as those seen in March. This may be the result of some confidence gained by market players in view of: 1) currently increasing LNG cargoes waiting to be discharged at European ports (at prices significantly lower to the TTF reference price); 2) NOR´s announcement that it would increase the amount of gas to be exported to NWE and, 3) efforts made by various EU countries to reduce their reliance on RUS gas by either increasing the capacity of some of their existing regasification plants, lease some floating units, or build some new facilities. In the specific case of France, latest news suggest that the Fos-Cavaou terminal will see its capacity increased by 13TWh in 2023 and 30TWh in 2024, while plans for increasing capacity at the Dunkerque terminal are currently under study. Meanwhile, a decision on whether to invest in an LNG floating terminal at Le Havre is also on the cards …

As for coal prices, API2 Cal23 contract added $29.17 m-o-m after closing at $209.93/Tn on the ICE on Fri, Apr 29th. The contract followed a bullish trend during the first 3 weeks of the month, supported by concerns that the EU would impose a ban on coal imports from RUS. This decision was officially confirmed by the EU on Apr 8th and entered into force on Apr 9th (note here that contracts concluded before Apr 9th and ancillary contracts necessary for their execution may still be executed until Aug 10th). This EU measure also had an immediate bullish impact on Asia-Pacific coal indexes (also supported by the US embargo on purchasing RUS materials). However, the last week of the month saw API2 Cal23 contract prices shed some ground on the back of increasing stocks.

Finally, re. emissions prices, EUA Dec22 contract closed at 84.45/Tn on the EEX on Fri, Apr 29th, up by an average EUR6.59 m-o-m. Emissions prices traded rangebound during the first two weeks of April (settling between EUR77.00-80.00/Tn), and volumes thinning considerable ahead of the Easter holiday period. However, EUA Dec22 contract took a bullish turn starting on Wed, Apr 20th, supported by some market players who started to feel the stress to meet their 2021 obligations (compliance period was due at the end of the month) plus some speculative trading.

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Profesional Experience

Céline, a young and dynamic person, had a first experience in the tourism sector as a community manager at Loups du Gévaudan, in Lozère. She joined HES team in November 2021 to diversify her knowledge: learning about the energy sector, specialising in marketing strategies in order to improve the company’s customer relations and, at the same time, developing her skills in coordination and project management.

Education

Céline graduated in Spanish and English Language, Literature and Civilisation at La Sorbonne IV (2018). She also holds a master’s degree II in cultural projects and establishments management, with a special focus on international tourism. She also studied abroad at the University of London (England) and Universidad de Morón (Argentina).

Céline Haya Sauvage

Marketing Responsible

DSC_0323

“Decarbonization of the Energy and Transport sectors is arguably today’s main economic driver for the industry.”

Profesional Experience

His career started in civil engineering as a Project Manager in France, Martinique and Australia. Afterwards, he became the General Manager of a subsidiary in Venezuela. In 1992, he established Dalkia in Germany (district heating, cogeneration, and partnerships) and represented Véolia in Thailand. In 2000, he opened the commercial office of Endesa in France to take advantage of the liberalized retail market. From 2006, as a development Manager at Endesa France, he led Endesa’s plan for Combined Cycle generation in France and developed the wind and PV portfolio of Snet at the same time. Philippe Boulanger worked for 3 years at E.ON’s headquarters coordinating the company´s activities in France. He was strongly involved in the French hydro concession renewal project. As a Senior Vice President – Project Director at Solvay Energy Services from April 2012 to February 2014 he was in charge of the H2/Power to gas and European direct market access deployment projects. Philippe has been an HES expert since 2014.

Education

Philippe Boulanger holds engineering degrees both from the Ecole Polytechnique and the Ecole Nationale des Ponts & Chaussées (France) and has a combined experience of more than 25 years in energy and infrastructure. In addition to English, Mr. Boulanger is fluent in French, German & Spanish.

Philippe Boulanger

Electricity Expert

HES-Philippe-Boulanger

“The world is changing. New investors pay particular attention to the energy sector while historical actors adapt their position to the market.”

Profesional Experience

Antonio started his career in the electricity sector in 1991 working as a member of staff for the General Manager of Sevillana de Electricidad (Spain). In 1997, he was in charge of the commercial regulation at Endesa Distribution. In 2000, he joined Endesa’s European M&A department. He was appointed CEO of Endesa Power Trading Ltd in 2003. He became Head of Energy Management for SNET, France, in 2004 and was appointed CEO of this company in 2008. In 2009, he held the position of Head of Corporate Development for E.ON France. In 2011, he founded Haya Energy Solutions (HES), a consulting firm which assists companies in optimizing their value chain: from strategy definition to day-to-day operations, based on a strong experience and understanding of the energy industry. From 2015 to 2018, Antonio was Chairman and CEO of 2 French CCGTs (2x410MW), owned by KKR. At the end of 2018, he joined Asterion Industrial Partners, a dedicated infrastructure investment fund, as an Operating Partner.

Education

Antonio graduated from the Escuela Técnica Superior de Ingenieros of Seville (Spain) and holds an MBA degree from Deusto University (Spain).

Antonio Haya

CEO