Nena News

GERMAN – Weekend drops as forecasts show high wind output

(Montel) German weekend power prices fell for the fourth consecutive session on Thursday morning as forecasts showed wind generation reaching near a record high.

The weekend baseload contract last changed hands at EUR 9.75/MWh at one broker, down by EUR 0.25 on the previous close. The contract has shed almost 50% since last Friday.

“It looks like tomorrow evening will be the start of a very windy weekend, and on Sunday, prices could crash completely,” said analyst Sigurd Lie at Oslo-based analysis firm Nena. “We could easily get negative prices for some hours on Sunday, and on Monday morning, prices could also get really, really low and close to zero.”

Nena expects wind power production to average around 25 GW on Saturday and 32 GW on Sunday, before falling to 25 GW on Monday – well above current levels of less than 2 GW and forecasts for 12 GW late on Friday.

The German wind power record currently stands at 33,921 MW from 8 February.

The baseload contract for Friday last traded down EUR 1.10 at EUR 26.90/MWh.

Cooler weather, stronger fuels
Further out, baseload for the week ahead was up EUR 0.92 on the day, at EUR 22.75/MWh, while the equivalent for March traded EUR 0.67 higher at EUR 22.65/MWh.

A Germany-based trader attributed the rising forward prices to revised forecasts calling for colder and less windy weather than previously expected.

Temperatures are expected to rise from an average 2.5C currently to 10.5C on Sunday – more than 7C above the seasonal norm – before falling to about 3C around the middle of next week, according to Nena.

Meanwhile, the benchmark Cal 17 baseload contract was last seen up EUR 0.51 at EUR 21.43/MWh – its highest level since Wednesday last week – due to stronger carbon and coal prices, market players said.

The API coal contract for 2017 last traded at a 10-day high of USD 37.80/t, up USD 0.61 from Wednesday, while the Dec 16 carbon contract traded up EUR 0.27 at EUR 5.37/t earlier in the session, its highest level since 5 February.


Reporting by:
Iselin Rønningsbakk
11:48, Thursday, 18 February 2016