EUA and power prices jumped on EDF’s downward revision of nuclear output target

The power spot prices are mixed for today in northwestern Europe, down in Germany due to the wind production expected to surge near 40GW today, up in France on weaker hydro generation and strong demand with temperatures lingering 2°C below normal, and in the middle for Belgium and the Netherlands, torn between the first two fundamentals. The day-ahead prices averaged 199.86€/MWh in the four countries, -3.70€/MWh from Friday and -60.91€/MWh week-on-week.

The carbon prices jumped by 3€/t at the market open on Friday on news that EDF reduced its nuclear output target for 2022 by 30TWh (330-360TWh to 300-330TWh) as the announce is likely to imply a stronger call for thermal plants this year, and hence a higher demand for EUAs. The emissions prices attempted to continue rising in the morning but corrected a first time after the German auction cleared with a massive 57-cent discount to the secondary market and a second one early in the afternoon, possibly pressured by losses in the equity markets. The EUA Dec.22 eventually closed at 82.08€/t, still +1.52€/t from Thursday’s settlement. Some market participants are attributing the lack of strong direction taken by the EUAs to the market’s current low liquidity.

The power forward prices unsurprisingly rose as well on the news of lower-than-expected nuclear availability, with the French prices posting the largest gains.