Carbon and power prices retreated on weaker energy complex and mild weather forecasts

The European power spot prices were mixed on Tuesday. While German prices eroded 2.65€/MWh to 52.68€/MWh, the French and Belgian prices rose significantly to respectively 70.16€/MWh (+6.31€/MWh dod) and 81.45e/MWh (+18.06€/MWh dod). Prices in the Netherlands however remained stable at 59.59€/MWh, a mere 0.20€/MWh increase day-on-day.

The low temperatures continued to strengthen the French power consumption yesterday which rose by 2.43GW from Monday to 77.91GW on average. The country’s nuclear generation steadied at 51.16GW, -0.04GW from the day prior. The German wind production eased by 1.20GW to 16.79GW on average and should fall by around 6GW today.

EUAs continued to erode Monday morning’s sharp gains, pressured by profit-taking, forecasts of milder and windier weather from mid-January and an overall weaker energy complex combined with losses in the European financial market. Most market participants seem however to keep their short-term bullish outlook for carbon prices, pointing to the limited downward potential due to the supply shortage started on Dec.15^th and schedule to last until Jan.29^th. The EUA Dec.21 contract eventually settled at 32.96€/t, -0.73€/t from Monday. The power prices posted hefty losses along the curve yesterday, pressured on the far curve by weaker fuels and emissions prices while short-term contracts were driven down by the forecasts of milder temperatures and stronger renewable production.