The European power spot prices faded yesterday amid forecasts of improving nuclear availability, a sudden surge of wind and hydro production and decreasing power demand. The day-ahead prices hence averaged 289.05€/MWh in Germany, France, Belgium and the Netherlands, -22.64€/MWh day-on-day.
The sharp bullish rally continued on the gas and power forward markets as Germany raised further its emergency plan to the second level, opening the way for further measures in order to mitigate the physical risk for German consumer over the coming winter. Poor liquidity also started to change the shape of the French curve with the Q1 2023 (579.20€/MWh) now dropping below the Q4 2022 (637.63€/MWh).
The EUAs posted decent gains on Thursday in an upward move mostly attributed to increased hedging demand following the quarterly options expiry that took place on Wednesday. The EUA Dec.22 closed at 84.13€/t, +2.25€/t from Wednesday’s settlement. The outlook is more neutral for today as the market should take a breath ahead of the weekend after this quite eventful week, the technical indicators not providing any directional signal while the recent sharp increase of gas prices is keeping the coal-to-gas switch range above the carbon prices until Q2 2024, limiting the support provided by any further rise of gas prices.
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