GERMAN – Front week rises 4% as wind outlook revised down

 (Montel) German power prices for next week rose 4% on Thursday morning amid a downward revision in wind power forecasts and buoyant power prices in France.

The front-week baseload contract last changed hands at EUR 31.75/MWh, up by EUR 1.25 from the prior close, broker data showed.

“Prices are rising now because today’s forecasts are showing less wind for next week than yesterday’s prognosis,” said analyst Sigurd Lie at Oslo-based Nena.

“Decent amounts of wind are still expected, but forecasts are volatile, especially for the start of the week, and if wind output suddenly drops markedly one day, like it might do on Monday, there is further [price] upside,” he said.

Wind power production in Germany is expected to average just 5 GW on Monday, rising to 11-15 GW between Tuesday and Saturday, Nena data showed.

German prices also found support from the French power market, where prices rose amid expectations of rising demand for heating due to forecasts of falling temperatures, Lie said.

The French week-ahead baseload contract was last seen up EUR 0.75 at EUR 40.75/MWh.

Temperatures in France are forecast to fall from an average of more than 10C on Sunday to around 5C by next Saturday, 0.5C below the seasonal norm, Nena data showed.

Risk of negative Sunday
Further in, however, German power prices eased on the back of expectations of rising wind power in the coming days – which could possibly result in negative prices during some hours on Sunday, traders said.

“Wind forecasts for Sunday have been revised down a bit, but there is still a possibility that power prices will turn negative then due to high wind power production,” said a Germany-based trader.

Nena data showed wind generation rising to 20 GW on Friday and 28 GW on Sunday from around just over 10 GW in the current session.

The day-ahead baseload contract traded down EUR 2.10 on the day, at EUR 31.40/MWh, while the weekend contract traded EUR 0.50 lower at EUR 17.50/MWh.

Meanwhile, the benchmark Cal 16 baseload contract was last seen down EUR 0.10 at EUR 29/MWh.