(Montel) Germany’s benchmark power Cal 18 contract extended the previous day’s gains on Friday amid a buoyant coal market.
The front-year contract traded last up EUR 0.20 on the day at EUR 28.70/MWh – distancing itself further from Wednesday’s close of EUR 26.75/MWh, a three-month low.
Tom Høvik, head of technical analysis at Montel, said the contract could continue to rise next week so long as it held above the key resistance area of EUR 28.15/MWh.
Meawhile, analysts pointed to rising European coal prices, with the 2018 API 2 coal contract advancing USD 0.30 on the day at USD 63.80/t on Ice Futures. The fuel price generally influences German power.
“The main driver [in coal] is still coming from Asian markets and the reason for this is high risk of supply disruption in Australia which is expected to be hit by a cyclone in the next few days,” said Diana Bacila, a coal analyst at Oslo-based Nena.
Spot prices hold steady
Closer in on the curve, however, the picture was mixed, with the weekend contract down EUR 0.03 at EUR 25.25/MWh.
Forecasts collated by Montel showed combined wind and solar reaching a midday peak of 28 GW on Saturday – 2 GW above TSOs’ expectations – before falling back to 18 GW on Sunday.
One Germany-based trader noted expectations of strong solar generation over the weekend for weighing on prices. “There's a lot of sun peaks and this is bringing down the price,” the trader said.
Meanwhile, the front-month baseload contract was up EUR 0.10 at 28.45/MWh.
Nena expects wind and solar output to average 6.3 GW and 4.2 GW respectively over the coming nine days.
Temperatures across Europe are expected to average 2-4C above normal over the same period, according to Sweden’s SMHI.