EUAs rose alongside the stronger energy complex

The power spot prices plunged in northwestern Europe yesterday amid forecasts of surging wind output, stronger solar generation, slightly improved French nuclear production and weaker power demand. The day-ahead price hence dropped to their lowest level since mid-June at 42.62€/MWh on average in Germany, France, Belgium and the Netherlands, -29.65€/MWh day-on-day.

Ignoring the potential pressure from the fortnightly UK carbon allowances auction, the EUAs rose by 0.93€/t (+1.8%) to 53.84€/t yesterday in an upward move attributed to the stronger gas prices strengthening the coal for the more emitting coal-fired power plants, an above-average demand in the morning Polish auction and a bullish sentiment spurred by the halved auction supply coming in August.

Meanwhile, the Commitment of traders data showed that the Investment funds reduced their net position on ICE by a significant 12.7% last week while the Other financial institutions cut their length 5.50%.

Lifted by the higher gas and carbon prices, the power prices posted hefty gains along the curve on Wednesday.

eua and gas prices vs implied coal to gas switch prices
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