(Montel) German spot power could drop 13%, or nearly EUR 6, from its September average this month amid higher nuclear availability in France and more wind power output, traders polled by Montel said this week.
German day-ahead prices were set to average around EUR 38/MWh this month, after totalling EUR 43.69/MWh in September – which was the highest monthly average since January 2019.
Prices last month were driven by low wind power generation and reduced French nuclear availability amid unplanned outages, with some hourly prices soaring to levels near EUR 4,000/MWh.
“Overall capacity availability should look better this month,” said a German trader.
He also noted that along with higher French nuclear availability, Germany should see more capacity online as the heating season was starting.
In addition, the latest forecasts showed higher than usual wind output for the first 14 days of October, he added.
Windy outlook
Wind power generation should average 16.2 GW in the first two weeks of the month, 2 GW above the norm, and compared with 10.3 GW in the last week of September, data from Montel’s Energy Quantified (EQ) showed.
French nuclear availability should average 40.3 GW over the period, compared with 34.5 GW in the last two September weeks, according to EQ.
“There will be decent wind [in the] first third of October, but as usual, timing and uncertainty of French nuclear power is an issue,” said Sigurd Lie, power analyst at StormGeo.
He saw German spot prices averaging EUR 38/MWh this month.
Return of coal
Another analyst noted while the first half of October would likely be windy, there was still a chance for higher prices in the second half of the month, which would bring coal plants back to the market.
“Coal is particularly dependent on CO2, but all in all, we will definitely need coal-fired power plants when demand peaks and there is little wind or sunshine, so that they will set the high price as marginal power plants,” he said, with it also being the case last month amid the French nuclear outages.
German hard coal-fired output soared last month to 4.43 TWh, its highest level since January and up more than double from 1.9 TWh in August, data from think-tank Fraunhofer ISE showed.
European carbon prices rose last month, with the benchmark Dec 20 EUA contract averaging at EUR 27.80/t, up 3.4% from its average in August.
However, the benchmark gas contract rose more and saw prices trend around EUR 11.45/MWh for the TTF front month, up EUR 3.37, or 42% month on month, making gas plants less profitable.
The German October power contract traded in a EUR 37.15-42.25/MWh range on the EEX and ended the month EUR 1.90 higher at EUR 42.05/MWh.