Demand growth outstrips renewable energy gains

Spot electricity prices in Europe fell on Monday as wind and solar power production is expected to outpace rising demand in the region.

At 09:52 GMT on Tuesday, the German electricity price was 87.50 euros per megawatt-hour (MWh), down 21.2% from Friday’s price for delivery on Monday.

LSEG data revealed the equivalent French contract was €62/MWh. The data showed the French Monday contract was not traded on Friday.

Naser Hashemi, an analyst at LSEG, says Germany’s residual load is expected to be lower due to stronger renewable energy supplies. Imports are also expected.

German wind power production is expected to double on Tuesday, from 5.8 gigawatts to 10.4 GW. Meanwhile, French production will increase by 2.5 GW to 4.6 GW.

The data shows that German solar capacity is expected to increase by 2.9 GW to 13 GW.

LSEG data shows that power generated by German solar panels will continue to rise steadily, reaching around 15 GW by Thursday before falling to 14 GW by Friday.

France’s nuclear potential remained unchanged at 67%.

The data shows that Germany’s energy consumption is set to rise by 1.8 GW on Tuesday to 53.5 GW. In France, demand is set to rise by 2 GW to 40.1 GW.

The German electricity price for the coming year rose by 0.2% to €100.40/MWh, while its French equivalent, Cal ’25’, rose by 1.1% to €85.45/MWh.

The price of European CO2 emission permits, which expire in December 2024, increased by 1.1% to €73.35 per metric tonne.

Veyt analyst Anders Nordeng said the return of three French nuclear plants and the prospect of strong growth in solar and wind power production were factors that were likely to be negative for gas and coal.

He added that the impact of the fuel switch should be mitigated by a trend reversal. Rising gas prices have made coal-fired power more affordable than gas. (Reporting and editing by Emelia Sithole Matarise; Forrest Crellin)

(source: Reuters)