SEE to start 2022 with power prices at around EUR 218/MWh – EQ
Date: December 28th 2021
Author: Tanja Srnovršnik
South-east European spot power prices should open 2022 significantly below the record highs seen before the Christmas weekend, reaching about EUR 218/MWh in the first week, Montel’s Energy Quantified (EQ) data shows.After halving during the Christmas weekend from records of over EUR 400/MWh at the start of last week, south-east European spot power prices should decline further this week due to lower consumption, a higher wind power outlook, mild temperatures and a sharp decrease in gas prices, said Eylert Ellefsen, senior analyst and hydrology expert at EQ, on Tuesday.
The front-month contract on the Dutch gas hub TTF fell below EUR 100/MWh on Monday, after reaching a record high of EUR 187.79/MWh last week.
EQ thus sees SEE spot prices averaging between EUR 154.07/MWh in Bulgaria and EUR 168.18/MWh in Hungary this week, which is about EUR 80-100/MWh lower than expected a week ago.
The day-ahead baseload prices for delivery on 29 December were the highest in Serbia, where they reached EUR 170.38/MWh, closely followed by Slovenia and Croatia with prices of EUR 169.87/MWh. Spot prices on other regional power exchanges were below EUR 160/MWh.
The significant price volatility recently registered on European power markets is making outlooks for the first weeks of 2022 “more uncertain that we were used to,” said Ellefsen. Nevertheless, EQ in general expects spot prices to be significantly below the levels seen before the Christmas weekend and it also expects higher prices in week 2 than in week 1, he added.
In Romania, temperatures should average 0.6C next week, which is 1.8C above normal, EQ data shows.
Romanian wind power output should reach 1.05 GW next week, 0.05 GW above normal, while combined hydropower output in Romania and Serbia is expected to reach 3.1 GW or 0.1 GW above normal.
Power consumption in both Romania and Serbia should reach 12.4 GW, or 0.7 GW below norm.
These fundamentals in addition to higher wind power output in central west Europe will put downward pressure on south-east European spot power prices, which should average about EUR 218/MWh in the first week of 2022. Prices should increase by about EUR 45/MWh a week later.
“The gas short run marginal costs have declined by about EUR 70/MWh since last week, thus the price estimates for the first weeks of January are significantly lower than what we saw a week ago,” added Ellefsen.
Hungarian power contracts for the first week of January 2022 traded at EUR 186.29/MWh on the EEX exchange on Monday, while the contracts for week 2 traded significantly higher at EUR 307.34/MWh. January contract traded at EUR 285.09/MWh.
This article is available also in Slovene.
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