Second attempt for the Parliament

The European power spot prices were mixed yesterday, lifted in Germany and France by the higher fuel and carbon prices but down in Belgium and the Netherlands on forecasts of stronger solar generation. The day-ahead prices hence averaged 314.14€/MWh over the four countries, +9.02€/MWh day-on-day.

The power curve prices continued to rise alongside the gas market, buoyed by the growing uncertainties over the coming gas flows with numerous European countries setting early warning stage.

The EUA benchmark contract rose to and steadied around 85€/t on Tuesday as the market targeted this level for the options expiry taking place today, the 90€/t-strike calls still presenting the second largest open interest (6.2mt versus 1.8mt for the 85€/t and 3.2mt for the 80€/t contracts) but the level appearing too far up to be reached on time. Additional support might have come from the recent news that Germany intends to bring back coal, lignite and oil power plants to reduce its gas-for-power demand. Some participants also attributed the quietness of the market to the E-World event in Germany where many energy traders were expected to attend, and to a lack of positioning ahead of the Parliament plenary’s vote on the ETS revision scheduled today. The EUA Dec.22 closed the day at 84.73€/t, +73-cent from Monday’s settlement, but is dropping this morning, possibly driven down by the threat of the market access restriction measure being voted by the full Parliament, dampening the speculators’ buying interest. The plummeting oil market and the higher EUA 80€/t-strike call OI may provide additional pressure on the emissions prices as well. All in all, the carbon market’s focus should be on the new ballot today, even though few surprises are expected to come from it as the ENVI intend to re-table the amendments already agreed on during the last vote and found a compromise on the dividing CBAM and free-allocation phase-out clauses.