EUAs faded on UK auction

The European power spot prices continued to fade amid easing clean gas costs, surging wind output, and improving Belgian nuclear availability. The day-ahead prices averaged 144.06€/MWh in northwestern Europe, -33.21€/MWh with prices ranging from 74.15€/MWh in Germany to 219.54€/MWh in France.

Meanwhile, the power forward prices posted limited as the energy market continued to digest the possibility of the EU imposing a ban on Russian coal and oil imports, while the gas prices gave back early gains at the end of the session.

The EUA fell by 1.1% yesterday in a mid-day downward move mostly attributed to the UK auction and the British utilities subsequently selling their hedges in European carbon allowances. The sale of 600 000 EUAAs was also held on Wednesday and cleared with 69-cent discount to the secondary market. Steadying at the end of the session, the EUA Dec.22 eventually closed the day at 77.18€/t, -0.87€/t day-on-day

Numerous participants noted the recent lack of activity in the carbon market, pointing the lingering low liquidity and volatility and high trading costs of the wider markets. The looming compliance deadline might also remove one of the supportive factors for EUAs once passed, adding uncertainties on an already blurred outlook.