In the week of February 26, prices on European electricity markets were higher than the previous week. The exception was the Iberian market, where prices fell and were the lowest, which has been happening since February 18. Weekly Iberian wind production was the highest since October, resulting in the lowest weekly average price in history in Spain. Gas and CO2 prices halted the downward trend and rose compared to the previous week
Solar photovoltaic and thermal energy production and wind production
In the week of February 26, solar energy production increased in most major European electricity markets compared to the previous week, continuing the upward trend for the third week in a row. Increases ranged from 6.1% in Spain to 30% in Germany. France, with an increase of 15%, reversed the previous week’s decline. On the other hand, Italy recorded a 17% decline in solar energy production for the second week in a row.
As spring approaches and daylight hours increase, daily PV production in some markets has returned to levels last seen in the fall. On February 28, the Portuguese market generated 14 GWh, the highest value since the end of September and also the highest value ever recorded for the month of February, breaking the previous record set on February 20 when generation reached 13 GWh. The German and Spanish markets also recorded their highest solar production since October, with 187 GWh generated on March 3 in Germany and 119 GWh generated on March 1 in Spain.
For the week of March 4, according to the solar production forecast released by AleaSoft Energy Forecasting, the upward trend will continue this week in Germany and Italy. However, the Spanish market is expected to record a decline in solar energy production compared to the previous week.
In the week of February 26, wind production increased for the second week in a row in the Iberian Peninsula and Italy. In both cases, the increase was 11%. German and French markets reversed the previous week’s upward trend and recorded production declines of 47% and 12%, respectively.
Strong winds in the Iberian Peninsula lifted weekly production to levels last seen in late October. During the week of February 26, the Spanish market produced 2,102 GWh using this technology and the Portuguese market 546 GWh.
For the week of March 4, wind production forecasts from AleaSoft Energy Forecasting indicate an increase in Italy and Germany, while it is expected to decrease in France and the Iberian Peninsula.
Electrical demand
In the week of February 26, electricity demand rose for the second consecutive week in most major European electricity markets compared to the previous week. The Portuguese market recorded the largest increase of 5.7%. The Belgian, Spanish and Italian markets recorded the smallest increase of 2.0% in each case, with Italy reversing the previous week’s downward trend. Demand only decreased in the Dutch and German markets by about 5.3% and 4.0%, respectively. This was the third consecutive weekly decline for the Netherlands, while in the case of Germany the trend of last week was reversed.
The increase in demand was linked to lower average temperatures. In most of the European markets analysed, average temperatures for this week fell between 0.6°C and 1.7°C compared to the previous week. The exception was Italy, where average temperatures rose by 0.4°C.
For the week of March 4, according to the demand forecast issued by AleaSoft Energy Forecasting, the upward trend will continue and demand will increase in Belgium and the Iberian Peninsula. Germany and the Netherlands will also see an increase in demand, reflecting last week’s decline. In contrast, France, Italy and Britain are expected to witness a decline in demand.
European electricity markets
After the recovery recorded in the last days of the previous week, during the week of February 26, prices in the main European electricity markets fluctuated, recording averages higher than the prices of the previous week in most cases. The exception was the MIBEL market in Spain and Portugal, where it fell by 81%. On the other hand, the EPEX SPOT market in Belgium and France achieved the highest increase of 21%. On the other hand, the IPEX market in Italy and the Nord Pool market in the Nordic countries recorded the smallest increases, by 2.5% and 4.5%, respectively. In the rest of the markets analyzed in AleaSoft Energy Forecasting, prices rose between 8.2% in the UK N2EX market and 18% in the EPEX SPOT market in Germany.
In the last week of February, weekly averages were below €70 per MWh in most European electricity markets analysed. The exceptions were the British market, with an average of €72.22/MWh, and the Italian market, with an average of €84.11/MWh. On the other hand, the Portuguese and Spanish markets recorded the lowest weekly prices, reaching €4.52/MWh and €4.53/MWh, respectively. These prices were the lowest in history on the Spanish market and the second lowest on the Portuguese market. In the rest of the markets analyzed, prices ranged between €48.57/MWh in the Nordic market and €67.56/MWh in the Belgian market.
Since February 18, the MIBEL market has successively recorded the lowest daily prices among the major European electricity markets. During the week of February 26, this market recorded 73 hours with prices below 1 EUR/MWh. Of these hours, there were 44 hours at €0/MWh, 14 of which were recorded on Sunday 3 March. On that Sunday, high levels of renewable wind and solar energy production combined with the low demand typical for that day of the week.
During the week of February 26, a rise in the average price of gas and CO2 emission rights and increased demand in most of the markets analyzed led to higher prices in European electricity markets. Declining wind energy production in markets such as Germany and France has also contributed to this behavior. However, the increase in wind and solar energy production in the Iberian Peninsula has led to a significant decline in prices on the MIBEL market.
Price forecasts from AleaSoft Energy Forecasting indicate that prices in European electricity markets may continue to rise in the first week of March. In the case of the MIBEL market, prices could also start to recover that week. An increase in demand and a decrease in wind production in most markets would encourage this behavior. The decline in solar energy production in the Spanish market will also contribute to higher prices in this market.
Brent, fuel and carbon dioxide
In the last week of February, front-month Brent crude futures on the ICE market recorded the minimum weekly closing price of $82.53 per barrel on Monday, February 26. In the first three sessions of the week, prices rose and on February 28 reached the maximum weekly closing price of $83.68 per barrel. This price is the highest since the first half of November 2023. In the last sessions of the week, prices remained stable. The closing price on Friday, March 1, was $83.55 per barrel, 2.4% higher than the price on Friday of the previous week.
In the last week of February, expectations about the continuation of OPEC+ production cuts in the next quarter helped keep closing prices above $83 per barrel in almost all sessions of the week.
Production cut announcements by Russia and other OPEC+ member states at the end of the week could have an upward impact on Brent prices in the first week of March.
Regarding the front-month TTF gas futures contracts on the ICE market, on Monday, February 26, they reached the minimum weekly closing price of EUR 24.01/MWh. During the last week of February, prices rose in almost every session. As a result, on Friday, March 1, these futures contracts recorded the maximum weekly closing price of EUR 25.81/MWh. According to data analyzed at AleaSoft Energy Forecasting, this price was 13% higher than the previous Friday.
Forecasts of colder temperatures and lower wind production contributed to an increase in TTF gas futures prices, as well as supply disruptions from Norway. But despite the increases, abundant supply of liquefied natural gas and high levels of European reserves kept closing prices below those recorded in the first weeks of February.
For the sake of respecting the future of CO2 emissions in the EEX Mercado for the due date of 2024, in the month of February 26 with a price of 53.97 €/t, this month the week. In the first three sessions of the week, prices rose until they reached the maximum weekly closing price of €57.84/ton on February 28. According to data analyzed at AleaSoft Energy Forecasting, this closing price was 6.0% higher than the same day of the previous week. But in the last sessions of the week, closing prices remained below €57 per ton. The closing price on Friday, March 1, was €56.37/ton, 8.0% higher than the previous Friday.
AleaSoft Energy Forecasting’s analysis of the outlook for European energy markets and financing of renewable energy projects
During March, AleaSoft Energy Forecasting and AleaGreen promoted long-term price curve forecast reports for European markets. Long-term price forecasts from AleaSoft Energy Forecasting and AleaGreen feature hourly details, confidence bands, and 30-year horizons. These forecast reports can be useful for obtaining commercial financing and for sizing a power purchase agreement (PPA).
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