Emissions prices dropped as auctions resumed

The European power spot prices edged down yesterday, pressured by forecasts of stronger wind, solar and hydro generation on one side and by the weaker gas and emissions prices on the other. The day-ahead prices averaged 250.55€/MWh in Germany, France, Belgium and the Netherlands, -10.21€/MWh day-on-day, and should drop further in the upcoming days due to the rising renewable production.

The EUAs collapsed by 6.2% on Monday with the Dec.22 contract hitting as low as 79.80€/t in a sharp downward move attributed mostly to a weak first auction of the year and strengthened by the falling equities. Some participants also pointed to short-sellers taking advantage of the resuming primary sales and subsequent expected fall of prices (at least in the short-term) and aiming to buy back allowances at a lower prices when an attractive level for industries and utilities will be met. The EUA auction held yesterday cleared 36-cent below the spot prices and with a weak 1.27 bid coverage,  well below the 1.65 averaged in 2021.

Despite a short-lived drop below, the 80€/t support held and the EUA Dec.22 eventually closed the session at 80.09€/t, -5.33€/t from Friday’s settlement.

The power forward prices unsurprisingly tracked the fading gas and plunging carbon prices and posted losses along the curve yesterday.

Energyscan power news
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