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SEE spot prices to fall EUR 5/MWh next week after recent records – EQ

SEE spot prices to fall EUR 5/MWh next week after recent records – EQ

Date: June 29th 2021

Author: Tanja Srnovršnik

Category: Trading

Topic: Electricity

A slight increase in wind power output and a drop in temperatures are expected to slightly lower southeast European (SEE) spot prices next week from the recent record highs, shows Montel’s Energy Quantified (EQ) data.

EQ tabelaThe heatwave, high CO2 and gas prices and very low wind power output have pushed the spot prices in Germany and central-western Europe (CWE) to this year’s record high levels. The SEE spot prices have followed this growing trend, exceeding CWE prices by about EUR 10/MWh, said Eylert Ellefsen, senior analyst and hydrology expert at EQ, on Tuesday.

The Hungarian and Romanian day-ahead baseload power prices reached a new record of EUR 108.81/MWh for delivery on 28 June. On the Slovenian BSP, even higher prices of EUR 111.23/MWh were reached for the delivery day of 29 June.

These bullish prices are also a result of low wind power output in SEE. This week’s average wind generation in Romania is estimated at 0.35 GW, down from the normal average of 0.6 GW, while German wind output is also way below the norm, shows EQ’s data. According to Ellefsen, the marginal costs of wind power production have increased by nearly EUR 7/MWh since last week.

The fuel short run marginal costs (SRMCs) have increased by about EUR 7/MWh since last week. The benchmark Dec 21 EUA contract traded as high as EUR 56/t on Tuesday.

EQ expects that SEE spot power prices will average between EUR 95.28/MWh in Bulgaria and EUR 96.52/MWh in Slovenia for the whole of this week.

The price levels next week “will be somewhat lower due to slightly increasing wind power output, somewhat lower temperatures and rather stable hydropower output,” said Ellefsen.

Wind generation is forecast to average 0.5 GW in Romania next week, while in Germany it is expected to average 7.3 GW, 3.6 GW below the norm, according to EQ’s data.

EQ’s spot price forecast for next week shows that average prices in SEE will be about EUR 4-5/MWh lower than this week.

Ellefsen added that the SEE power contracts for July have increased by about EUR 7/MWh. “The July contracts at about EUR 92/MWh relate well to the week-ahead contracts, so our market view is currently neutral after last week’s strong rise in prices,” he said.


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