French power spot prices spiked on forecasts of extreme tension

The power spot prices for today took opposite directions in north western Europe, falling by 84.80€/MWh from Friday to 75.33€/MWh in Germany on forecasts of a wind output surging close to 40GW, edging in Belgium and the Netherlands to respectively 225.80€/MWh and 212.84€/MWh and sky-rocketing to 551.43€/MWh in France on a combination of well-below normal temperatures, low nuclear availability and a wind shortage. The French day-ahead price was indeed driven up by the extremely tight situation expected during the morning peak, with prices reaching nearly 3000€/MWh for the 8:00 to 9:00am hour.

The power forward prices tracked the early bullish boost of the gas market and the following sharp correction as the impact of gas payment in rubles faded while strong Russian gas supply nomination and some profit-taking provided additional pressure.

The emissions prices observed a significant volatility on Friday morning, jumping by nearly 3€/t and close to 80€/t in the first hours of trading before the daily auction clearing with a massive 1.45€/t discount to the secondary market drove the EUAs back down to 78€/t where they hovered for the remainder of the session. The EUA Dec.22 closed the week at 78.49€/t, +2.01€/t from Thursday’s settlement but only 11 cent below the previous week.

The main news of the carbon market was however the publication of the preliminary 2021 verified emissions data. Only 88% of the stationary installations under compliance obligations have reported their emissions so far, but the data are suggesting a 9% year-on-year increase in emissions in 2021, with the estimated volume estimated to be around 1 360mt on a like-to-like basis. Sector-wise, the power and heat emissions appear to have risen by 10.8% while industrials’ increased by 6.1% and aviation’s by 14.5%.

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