EUAs and power prices reversed from early weakness on revised French 2023 nuclear output target

Despite higher clean gas costs, the European power spot prices for today fell from Friday as a forecasted surge of renewable production offset the lower demand and French nuclear availability expected in the upcoming hours. The day-ahead prices averaged 155.19€/MWh in Germany, France, Belgium and the Netherlands, -36.43€/MWh.

The carbon and power forward prices continued to retreat at the market open on Friday with the EUA benchmark contract hitting as low as 88.50€/t. Both markets however quickly reversed after EDF revised its 2023 nuclear output estimate from 340-370 TWh to 300-330TWh, as announced earlier in the week, and sharply rose back throughout the remainder of the day. A strong EUA auction result and the lingering tension over the Ukraine situation are likely to have provided support as well. The EUA Dec.22 closed the week at 92.87€/MWh, +2.09€/MWh day-on-day but -3.71% from the previous Friday. 

Some market participants pointed to renewed interest from compliance buyers in the carbon market on the second part of last week after the EUAs collapsed from their new record above 98€/t down to 90€/t. The carbon prices are correcting this morning, ignoring the growing tension in Ukraine and its impact on the gas market to track the falling financial markets. On the other hand, the power curve prices are posting significant gains alongside the gas market on the risk of a Russian invasion.