SEE to see further moderate increase in spot prices next week – EQ
Date: September 21st 2021
Author: Tanja Srnovršnik
Average south-east European (SEE) spot power prices next week are expected to witness some additional growth to levels between EUR 146-149/MWh, according to Montel’s Energy Quantified (EQ) data.“Extreme” fuel prices continue to propel European spot power prices upward, said Eylert Ellefsen, senior analyst and hydrology expert at EQ, on Tuesday. The front-month gas contract surged more than EUR 9 on Monday, although it remained below its record high of over EUR 79/MWh. Meanwhile, carbon prices have recently lost correlation with gas prices, but are still trading at over EUR 60/t.
The day-ahead baseload prices for delivery on 22 September reached EUR 163.94/MWh on the Slovenian BSP exchange, while they were around EUR 146/MWh on the Romanian and Hungarian power exchanges, Opcom and HUPX. On the Bulgarian Ibex power exchange, they were EUR 147.17/MWh.
A new rise in fuel prices is also one of the reasons why EQ estimates SEE spot power prices this week will be around EUR 3-5/MWh higher than was forecast last week, said Ellefsen. Regional spot prices should average from EUR 128.70/MWh in Bulgaria to EUR 142.62/MWh in Slovenia.
Meanwhile, wind power output is expected to return to normal levels from the declines seen last week. EQ’s data shows German wind production will average 12.6 GW this week, with further growth expected in the coming two weeks, while Romanian wind output will average 0.73 GW.
Fall in Bulgarian nuclear output
SEE spot prices are expected to see a “very moderate increase” next week compared to the “rally” seen since the start of August, said Ellefsen. Spot prices are expected to average between EUR 146.15/MWh in Romania and EUR 149.23/MWh in Slovenia. Bulgaria is forecast to see bigger, EUR 12/MWh growth in prices compared to this week.
“The fundamental outlook for the SEE market over the next week predicts rather low temperatures, lower than normal hydropower output and normal wind power output,” said Ellefsen, adding that German wind power output will be rather stable next week and close to normal levels.
Romanian and Serbian hydropower output is set to average around 2 GW over this and the next week.
“Available nuclear capacity will be somewhat lower in Bulgaria next week, but on the other hand the lignite and gas-fired capacity in the SEE area will see an increase,” added Ellefsen. Bulgarian nuclear output will fall from 1.8 GW this week to 1 GW next week, EQ data shows.
Ellefsen added that the traded week-ahead SEE power prices are about EUR 10 higher compared to the current situation and they seem to include a further upside development on the fuels market. “Our week-ahead forecast is based on a more stable fuel price level after the recent extreme bullish development,” he said.