Nena News

GERMAN – Day-ahead power jumps 6% on lower wind output

(Montel) Germany’s day-ahead power price climbed 6% on Thursday after forecasters revised down their wind output expectations.

The baseload contract for Friday traded at EUR 34.45/MWh, up EUR 1.95 on the day.

Traders highlighted reduced wind forecasts, especially in the evening hours that suggested German power prices could briefly couple with those in neighbouring France, where prices are higher. 

“The hours between 19:00-21:00 CET could see coupling,” said Bengt Longva, an analyst at Oslo-based Nena. “You don’t need to fire up [efficient gas-fired] CCGT units during this period, you just need to raise German prices to a level that attracts exports away from France.”

Nena slashed its wind production expectations by roughly 13% for the next five days. It expects around 5.4 GW of wind production on average for Friday, almost 2 GW or 26% less than its previous estimate. 

German solar production and electricity consumption levels look relatively normal for Friday, Longva added. Nena expects baseload demand of 68 GW with consumption rising as high as 75 GW.

Combined wind and solar production should still continue to rise over the coming days. Nena expects 9.7 GW of solar and wind on Friday, rising to 22 GW on Sunday and 33 GW on Monday.    

A portfolio manager also pointed to nervousness around a brief outage at RWE’s Gundremmingen C on Wednesday as supporting day-ahead prices. 

Monday output record?
The front-week contract last traded at EUR 22.50/MWh, down EUR 0.50 on the day and more than EUR 12 lower than prices are set to average for this week, based on brokers’ quotes.

Expectations of “massive” renewable energy next week combined with the Easter holiday on Friday had opened up a huge week-on-week drop in prices, said a portfolio manager, noting the potential for a new combined solar and wind output record above 40 GW on Monday. 

The previous record for combined wind and solar production reached 38 GW in April last year, said Longva.

Further out, the benchmark Cal 16 contract for power climbed EUR 0.15 to reach EUR 32.25/MWh on Thursday. 

Reporting by:
Nathan Witkop
12:05, Thursday, 26 March 2015