EUAs erased Monday’s losses

The European power spot prices slightly faded yesterday, possibly weighted by the rising French nuclear availability and hydro generation offsetting the forecasts of lower wind and solar output and higher power demand. The day-ahead prices averaged 186.83€/MWh in Germany, France, Belgium and the Netherlands, -17.21€/MWh day-on-day but nonetheless +17.00€/MWh from the previous week due to the colder temperatures and weaker wind generation.

The emissions prices rebounded from Monday’s drop and climbed back above 59€/t with support from firmer gas prices and most likely dip buyers attracted by the low prices of carbon allowances. The rising equities might have provided additional support, although the correlation of the carbon prices with the financial markets has appeared to be weak over the past weeks. In any case, yesterday’s bullish move highlights that the EUAs remain well supported below 58€/t for now, despite the weaker industrial production and the investment funds reducing their length since late September. Market participants are however likely to be in a wait-and-see approach until next week and the potentially higher Russian gas flow to Europe. The EUA Dec.21 eventually settled at 59.46€/t, +2.52€/t (+4.43%) day-on-day.

Meanwhile, the power forward prices tracked the increasing gas and emissions prices and posted moderate gains along the curve.