In the week of February 19, prices on European electricity markets fell compared to the previous week. The MIBEL market had the lowest prices. Increased wind production and lower prices for gas and carbon dioxide have contributed to this behavior. In Portugal and France, the highest wind production for February was recorded, and in Spain and Portugal, the record for the highest PV production for February, reached the previous week, was broken again.
Solar photovoltaic and thermal energy production and wind production
During the week of February 19, solar energy production saw an increase in most major European electricity markets compared to the previous week, maintaining the upward trend for the second week in a row. Increases ranged from 9.3% in Portugal to 17% in Germany. However, exceptions were seen in the Italian and French markets, where solar production fell by 23% and 13% respectively, reversing the upward trend of the previous week.
As happened the week before February 12, some markets saw daily PV production return to levels last seen in the fall, a trend that will become increasingly common as spring approaches. On February 20, the Spanish and Portuguese markets again set February records with generation of 118 GWh and 13 GWh respectively, slightly exceeding the maximum reached during the previous week. In addition, the German market recorded its highest solar PV production since October, with 156 GWh generated on February 25.
For the week of February 26, according to the solar production forecast issued by AleaSoft Energy Forecasting, the trend seen in the week of February 19 will continue and solar production will increase in the Spanish and German markets and decrease in the Italian market.
During the week of February 19, wind production saw a weekly increase in major European electricity markets, reversing the downward trend observed the previous week. The increases ranged between 31% and 79% recorded in the Italian and Portuguese markets, respectively.
Furthermore, the Portuguese and French markets recorded their highest daily wind production ever during February. France reached this record on February 22, generating 365 gigawatts per hour, a level that had not been recorded since the beginning of the year. On the other hand, Portugal reached its highest wind energy production for February on February 25, generating 107 GWh using the technology. Moreover, this value represents the maximum recorded since mid-October in the Portuguese market.
For the week of February 26, wind production forecasts from AleaSoft Energy Forecasting indicate that the increasing trend will continue in Spain and Italy and be reversed in Germany, France and Portugal.
Electrical demand
During the week of February 19, electricity demand increased in most major European electricity markets, reversing the decline observed in the previous week. In the markets analyzed, the Iberian Peninsula showed the smallest and largest increases in demand. In the case of Spain, the smallest increase was recorded at 0.4%, while in Portugal, the largest increase was achieved at 4.5%, partly due to the recovery in demand after the corresponding holiday of Carnival Tuesday celebrated the previous week. In this market.
The Dutch and Italian markets showed an opposite trend to the rest of the analyzed markets. In the Dutch market, a decrease of 1.9% was observed, marking the second consecutive week of decline in demand in this market. In Italy, the downward trend continued for the fifth week in a row, this time recording a decline of 1.3%.
In the fourth week of February, a decrease in average temperatures compared to the previous week was recorded in most of the European markets analyzed, falling from 2.5°C in Belgium and Great Britain to 1.0°C in Germany. The exception was Italy, where average temperatures rose by 0.9°C.
In the week of February 25, according to the demand forecast issued by AleaSoft Energy Forecasting, the upward trend will continue and demand will increase in all analyzed European markets.
European electricity markets
In the first days of the week of February 19, prices on major European electricity markets registered a downward trend. In most cases, prices began to recover in the last days of the week. However, when taking into account the entire fourth week of February, the weekly averages were lower than the previous week’s averages in all markets analyzed in AleaSoft Energy Forecasting. The MIBEL market in Spain and Portugal recorded the largest decline of 54%. In contrast, the Italian IPEX market and the UK N2EX market recorded the smallest declines, at 7.6% and 8.2%, respectively. In the rest of the markets analyzed, prices fell between 13% in the EPEX SPOT market in Belgium and France and 17% in the Nord Pool market in the Nordic countries.
In the fourth week of February, weekly averages were below €60 per MWh in most European electricity markets analysed. The exceptions were the British market, with an average of €66.74/MWh, and the Italian market, with an average of €82.03/MWh. On the other hand, the Portuguese and Spanish markets recorded the lowest weekly prices, at €24.36/MWh and €24.45/MWh, respectively. In the rest of the markets analyzed, prices ranged between €46.48/MWh in the Nordic market and €57.51/MWh in the Dutch market.
Regarding hourly prices, from February 23 to 26, the MIBEL market recorded twenty-three hours with prices below 1 €/MWh. Of these hours, eight were priced at €0 per MWh.
During the week of February 19, a decrease in the average price of gas and CO2 emission rights and an increase in wind production led to lower prices in the analyzed European electricity markets. The increase in solar energy production also contributed to lower prices in the German and Iberian markets. In the case of the Italian market, demand decreased, which also helped lower prices.
Price forecasts from AleaSoft Energy Forecasting indicate that prices for most European electricity markets could rise in the last week of February. An increase in demand and a decrease in wind production will encourage this behavior. However, prices in the Iberian and Italian markets could continue to decline, affected by increased wind production in Spain and Italy, as well as an increase in Spanish solar production.
Brent, fuel and carbon dioxide
For most of the sessions in the fourth week of February, closing prices for front-month Brent crude futures rose on the ICE market. As a result, on Thursday, February 22, they recorded the maximum weekly closing price at $83.67 per barrel. This price was 1.0% higher than the previous Thursday and the highest since the first half of November 2023. However, after a 2.5% decline on Friday, February 23, these futures reached their lowest weekly closing price of $81.62 per barrel.
The growing instability in the Middle East, influenced by the US veto of the UN Security Council resolution on a humanitarian ceasefire in Gaza, contributed to the rise in prices during the fourth week of February. But concerns about the development of demand had a downward impact on Brent crude futures prices, causing them to decline at the end of the week. Expectations that interest rates will remain high in the coming months in the United States due to rising inflation have added to this concern. In addition, oil reserves in that country increased, affected by refinery outages.
Regarding the closing prices of TTF gas futures contracts on the ICE market for the first month, in the fourth week of February, they continued to record declines. As a result of this downward trend, on Friday, February 23, they recorded the minimum weekly closing price of EUR 22.93/MWh. According to data analyzed in AleaSoft Energy Forecasting, this price was 7.6% lower than the previous Friday and the lowest since May 2021.
Low demand levels at the time, ample supplies of LNG and high levels of European reserves had a bearish impact on TTF gas futures prices in the fourth week of February.
Regarding the closing prices of futures contracts for CO2 emission rights on the EEX market for the reference contract for December 2024, during the fourth week of February, they were less than 55 euros per ton. The maximum weekly closing price recorded on February 21 was 54.55 euros per ton. On the other hand, these futures contracts reached their lowest weekly closing price of EUR 52.21/ton, on Friday, February 23. According to data analyzed at AleaSoft Energy Forecasting, this closing price was 8.7% lower than the previous Friday and the lowest since June 2021.
AleaSoft Energy Forecasting’s analysis of the outlook for European energy markets and financing and evaluation of renewable energy projects
The next AleaSoft Energy Forecasting and AleaGreen webinar will be held on March 14. This will be the third webinar of 2024, the year of AleaSoft Energy Forecasting’s 25th anniversary. On this occasion, EY experts will participate for the fourth time in the monthly webinar series. In addition to forecasts for European energy markets, the webinar will analyze regulation and financing of renewable energy projects, PPAs, self-consumption, portfolio evaluation, the green hydrogen auction and the Innovation Fund.
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