Higher power output to ease current SEE spot price records – EQ
Date: November 23rd 2021
Author: Tanja Srnovršnik
South-east European (SEE) spot power prices should ease slightly next week from record highs of almost EUR 300/MWh due to expectations of a boost in regional power output, according to Montel’s Energy Quantified (EQ) data.A rise in fuel prices and a stronger central western European (CWE) market, due to lower German wind power generation, have pushed SEE spot prices further up.
The day-ahead baseload prices for delivery on 24 November were the highest in Serbia, where they reached EUR 310.63/MWh. It should be noted that the Serbian day-ahead power market is not yet coupled with other markets and so operates in an isolated mode.
Spot prices were EUR 288.3/MWh in Slovenia and Croatia, while they traded at EUR 282.80/MWh on the Hungarian and Romanian HUPX and Opcom exchanges. Spot power traded at EUR 272.30/MWh on the Bulgarian Ibex exchange.
Eylert Ellefsen, senior analyst and hydrology expert at EQ, attributes this growth to a 5% or so increase in gas and carbon prices since last week, adding that coal prices have increased by nearly 15%. European carbon prices even reached a new record of above EUR 71/t on Monday, while gas prices have seen further growth on Tuesday as greater demand amid cold temperatures and a fall in wind power generation compounded existing supply concerns.
This has also prompted EQ to increase its forecast for this week's south-east European spot prices by about EUR 20/MWh compared to the previous week, said Ellefsen on Tuesday. EQ now expects regional spot prices to average from EUR 234.19/MWh in Bulgaria to EUR 246.48/MWh in Slovenia this week, up from the EUR 206.11/MWh and EUR 222.91/MWh that was projected for those countries last week.
Rising power output
Next week, Slovenia, Hungary and Romania are expected to see average power spot price decreases of about EUR 13/MWh compared to this week, while prices in Bulgaria should decrease by about 2.5 EUR/MWh. Ellefsen cites “stronger production outlooks” as the reason for this.
According to EQ data, the 650 MW unit 1 of the Serbian Nikola Tesla B coal-fired plant will come online on 29 November. This is a few days later than previously announced by Serbian president Aleksandar Vucic earlier this month. Vucic said at the time that this would eliminate the need for power imports in Serbia.
Wind power output in both south-east Europe and central western Europe is expected to be about 40% above normal next week, averaging at 23.3 GW in Germany and 1.4 GW in Romania, said Ellefsen.
About double the normal precipitation should slowly increase hydropower output in Romania and Serbia to normal levels “after a long period with lower than normal levels,” said Ellefsen. Combined hydropower output in Romania and Serbia is forecast to reach 2.8 GW.
Meanwhile, Hungary’s nuclear capacity will remain lower because its 475 MW unit at Paks will be offline until the middle of December.
The fundamental outlook for the SEE market over the next week also shows that the region can expect a slight drop in temperatures, although no significant changes in consumption are expected, added Ellefsen. In Romania, temperatures should fall by 1.8C to an average of 2.5C next week and then to 1.4C the week after that, EQ data shows.
This article is available also in Slovene.
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