EQ: Several Bearish Factors Expected to Affect SEE Spot Markets Next Week
Date: January 27th 2021
Author: Tanja Srnovršnik
Slightly higher temperatures and hydropower production than normal, together with increased nuclear and lignite production capacities in several countries in South East Europe (SEE), are expected to have a bearish effect on spot power prices in the region next week, said Eylert Ellefsen, senior analyst and hydrology expert at Montel’s Energy Quantified (EQ), on Tuesday.“Last week (3) average spot power prices in the SEE area were slightly higher than forecasted by midweek, as the price level fell during the week,” explained Ellefsen.
Weekly average spot power prices amounted to 59.32 EUR/MWh in Slovenia last week, while in Hungary they amounted to 58.47 EUR/MWh, in Romania they amounted to 58.41 EUR/MWh, and in Bulgaria to 56.79 EUR/MWh, according to EQ’s data.
“Our spot price estimates for week 4 in the SEE area remain relatively unchanged from last week’s estimate,” noted Ellefsen.
Last Tuesday EQ estimated that prices will average between 54.62 EUR/MWh in Bulgaria and 55.47 EUR/MWh in both Slovenia and Hungary in week 4, and it also forecast workday baseload prices close to 60 EUR/MWh for this week.
This Tuesday EQ estimated that prices will average between 54.05 EUR/MWh in Bulgaria and 56.19 EUR/MWh in Slovenia this week (4).
Meanwhile, the day-ahead baseload power prices on the Hungarian HUPX power exchange for delivery on 27 January amounted to 59.39 EUR/MWh, while on the Romanian OPCOM exchange they amounted to 57.62 EUR/MWh. Prices on the Bulgarian IBEX power exchange amounted to 59.31 EUR/MWh, on the Serbian SEEPEX power exchange they amounted to 57.46 EUR/MWh, while on the Slovenian BSP power exchange they reached 58.23 EUR/MWh.
“For the week ahead (5), we expect rather calm weather conditions. Romanian wind power output will be close to normal, while temperatures and hydropower production are both forecast to be slightly higher than normal. In addition, we anticipate increased production capacity (nuclear and lignite) in several countries next week,” said Ellefsen.
EQ expects the price spread between Austrian and Hungary to also be limited next week, as can already be seen this week. “The price estimates for Hungary/Romania for next week are close to 54 EUR/MWh, which is close to the latest traded market prices too,” noted Ellefsen.
Ellefsen added that the price of EU emission allowances (EUAs) has been bullish since the start of last week, while the prices of gas and coal have remained fairly flat.
“The February contracts in the SEE area have been rather volatile over the last few weeks. Compared to the latest development in the spot market, we anticipate a fundamental downside on the month-ahead contracts for the SEE area,” concluded Ellefsen.