(Montel) German power prices for next week fell 3% on Friday morning as forecasts showed higher wind power production than previously expected and lower temperatures.
The front-week baseload contract last changed hands at EUR 35/MWh at one broker, down by EUR 1 from Thursday’s close.
The contract has risen EUR 4.50 or 15% over the past two weeks amid expectations of rising demand driven by soaring temperatures.
“There have been fears that the hot weather would lead to lower conventional power production in Germany due to problems with too warm cooling water, and too much higher demand in France due to air conditioning,” said analyst Sigurd Lie at Oslo-based analysis firm Nena.
He said prices were falling now because the latest forecasts show cooler temperatures and a rise in wind power generation from Wednesday next week.
Temperatures in Germany are forecast to fall from an average of 28.8C on Saturday –more than 10C above the seasonal norm – to 17.1C next Friday, Nena data showed.
Wind power production in the country, meanwhile, is expected to increase from an average of just over 2 GW this weekend to 18-20 GW between Wednesday and Friday next week.
In the French market, the week-ahead baseload contract last traded almost 40% higher than its German equivalent, at EUR 48.75/MWh, down by EUR 2.75 on the day.
One trader in Italy attributed the decline in French prices to cooler temperatures on the horizon, but added that “river temperatures are staying high” so French plants could have cooling water issues.
Outages lift weekend prices
Further in, the German day-ahead baseload contract last traded at EUR 38.75/MWh, up by EUR 0.75 on the day, but still markedly lower than the Phelix spot settlement for Friday, at EUR 44.76/MWh, the highest level since 24 March.
“The day-ahead is rising now because of outages, with availability for Saturday for hard coal plants having falling by about 2 GW since yesterday, while lignite availability is down by around 700 MW,” said Lie.
The benchmark Cal 16 baseload contract last traded down by EUR 0.15 at EUR 32/MWh, its lowest level in nine days, largely due to profit-taking, said the trader.