The Iberian MIBEL electricity market saw a week of record low prices, according to AleaSoft analysis. Hour 4 on Monday saw the lowest hourly price on the Spanish electricity market this year – €4.52/MWh. Hours 3, 5, 2 and 6 on the same day occupied the second to fifth lowest price positions, respectively, seen this year.
In the Portuguese market, hour 5 on Monday was the third lowest price so far this year, with €18.91/MWh. Looking at daily average prices, the price of Portugal Wednesday – €37.85/MWh – was the lowest this year, and the average price in Spain on the same day – €37.82/MWh – was the second lowest to date. In the Spanish market, the average price of the first four days of the week was €45.50/MWh, a decrease of 15% compared to the first four days of the previous week, and in the case of Portugal, the average price of the days of this week was €46.37/MWh, a week on week decrease of 14%.
The increase in wind energy production, together with a decrease in electricity demand in the Iberian peninsula – due to higher temperatures – were the main causes, according to AleaSoft. In addition, the current stability with a downward trend in the prices of the main fuels for generation – mainly of gas and coal – also favored a reduction.
European electricity markets
From Monday to Thursday, the average price of most European electricity markets decreased compared to the same period of the previous week. The decreases ranged between 0.6% on the EPEX SPOT market in the Netherlands and 37% on the EPEX SPOT market in Germany. The only market whose average price increased in the first four days of this week was the Nord Pool of the Nordic countries, with a 5.1% hike.
Sources: Prepared by AleaSoft with data from OMIE, EPEX SPOT, N2EX, IPEX and Nord Pool.
According to AleaSoft, an increase in wind energy production was the fundamental cause of a drop in prices. When comparing wind production during the first three days of the week, from Monday, with the same period of the previous week, in Germany it rose 472%, in France 363% and in the Iberian peninsula 153%. In some countries, such as Spain, Portugal, Italy, Belgium and the Netherlands, lower electricity demand was another factor in price declines.
Sources: Prepared by AleaSoft with data from ENTSOE, RTE, REN, REE and TERNA.
Brent, fuels and CO2
The Brent oil futures price for May this year on the ICE market remained at around the equilibrium point of $65/bbl that AleaSoft commented on at the beginning of the week. In Wednesday’s session it settled at $65.99/bbl.
The futures of the TTF gas in the ICE market for next month remained stable this week with a slight downward trend, settling on Wednesday at €16.85/MWh.
The API 2 coal for April in the ICE futures market started the week maintaining stability around the $75/t experienced since last week. In Wednesday’s session it dropped to $72.90/t, almost $2 lower than in the previous session.
The CO2 emission rights futures for the reference month of December 2019 in the EEX market were this week around what is considered by AleaSoft the current equilibrium point of €22/t. In Wednesday’s session they settled at €22.13/t.
Electricity futures
Electricity futures in Spain and Portugal for April in the OMIP market started the week at €49.50/MWh, a value similar to that seen at the end of the previous week, when the price rose. However, over the course of the week it started to fall and on Wednesday Spain settled at €48.50/MWh and in Portugal at €48.20/MWh. Something similar happened with the futures of Spain for the same product in the EEX futures market, whose settlement price on Monday was €49.47/MWh and on Wednesday €48.85/MWh.
The futures of France and Germany for the next month in the EEX market showed similar behaviour. The settlement price of France on Monday was €42.75/MWh, the same as on last Friday. On Wednesday it was €42.18/MWh. In Germany on Monday, futures settled at €41.34/MWh and on Wednesday, €40.65/MWh.
Mainland Spain, wind and solar energy
In the first three days of the week, the electricity demand of mainland Spain was 0.9% lower than in the first three days of the previous week. This week the temperatures were higher, favoring a decrease in demand. The temperature forecasts analysed by AleaSoft for next week show a decrease, which will cause electricity demand to increase.
As mentioned above, Iberian wind energy production increased this week. In mainland Spain, the increase in the first three days of the week was 197% compared to the first three days of the previous week.
Solar energy production, including PV and solar thermal Monday and Wednesday decreased 62% on the corresponding period of the previous week. For the next week, AleaSoft expects solar energy production will rise again, with an increase in sunshine hours.
This week, all nuclear power plants operated normally and daily hydroelectric production was around 60 GWh.
Sources: Prepared by AleaSoft with data from REE.
According to the latest Hydrological Bulletin, published by Spain’s Ministry for the Ecological Transition, hydroelectric reserves decreased 88 GWh this week, after five consecutive weeks of growth. Currently they are 11,036 GWh – 47.4% of total capacity.
