Lower power prices as demand weakens

EUROPEAN prompt power prices fell yesterday as wind and thermal power supply increased, while cooler weather temporarily in parts of the region dented demand. Traders said the trend was unlikely to last mid-term. Unseasonally high wind speeds and cooler temperatures this week could easily give way by next week to very warm and dry conditions, seen already last month they said. That should boost prices, they added.

The German baseload contract for today’s delivery dropped 6.6% to (R545) a megawatt hour (MWh). The equivalent French contract declined 5.2%

MWh (R568). German electricity demand for today will fall 100 MW to 61 gigawatts (GW) and demand in France will stay at 48.4 GW, data predicted.

Electricity production from German wind turbines forecast to rise to 9.3 GW today from 5.9 GW yesterday.

Along the curve, the benchmark German electricity contract for next year was up by just 0.3% at MWh (R487). This was well below a two-year high of (R495) recorded in the previous session after a rally in coal prices. The equivalent French year-ahead contract lost 1.5% to

MWh (R576). Coal cif North Europe was down 0.4% at $71.8/ton (R97), off 90c from an eight-month high of $72.7 (R986) it touched last Thursday in the global context of low output in Australia and Chinese buying.

Coal-fired electricity generation accounts for more than 40% of German power output.

In a related market, the Dec 17 expiry carbon pollution rights, which electricity generators must hold to offset their emissions, gained 0.9% to ton (R84). to is