The surging wind output and strengthening solar and hydro generation weighted further on the Euporean power spot prices yesterday, although the rather strong demand, especially in France where temperatures hover below normal this week, limited the losses. The day-ahead prices averaged 202.53€/MWh in Germany, France, Belgium and the Netherlands, -31.53€/MWh day-on-day.
The power curve prices extended losses as well, driven down by the waning gas prices and milder weather forecasts.
After a bullish opening driven the previous day’s post settlement trades, the EUAs faded throughout Wednesday alongside the gas and power markets and temporarily slipped below 80€/t at the end of the session. The support however held again and the EUA Dec.22 eventually settled at 80.01€/t, -1.29€/t from Tuesday’s close. The carbon prices are extending their downtrend this morning, already breaking below the above-mentioned support with market sentiment, technical indicators and energy complex all pointing toward further downside. A looming intervention from dip-buyers is however not to be excluded as the Dec.22 benchmark contract is nearing oversold conditions (RSI at 33 at the time of writing).
On the policy side, an early draft of the Parliament ENVI’s report on the ETS reforms, expected to be released on Friday, has been leaked to media yesterday with changes proposed (among other reforms) to the CBAM, the new building and road transport ETS and free allocation phase-out proposals from the Commission.
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