Power prices rose as EU planned ban on Russian coal imports

The power spot prices faded in north western Europe yesterday, pressured by forecasts of stronger wind and solar output, weaker demand and increasing Belgian nuclear availability. The day-ahead prices averaged 177.28€/MWh in Germany, France, Belgium and the Netherlands, -51.50 from the previous day.

On the curve, the power prices observed a bearish morning but reversed mid-day and rose quite sharply throughout the remainder of the session, buoyed by reports of potential European ban on coal imports from Russia (see our news for further details) which triggered another wave of buying in the gas market anticipating a higher demand while coal prices surged.

Driven by their negative correlation with the fuels complex, the EUAs presented opposite variations with a strong opening quickly followed by a retracement. The carbon market was once again marked by a slow activity and demand, with low exchanged volumes as most traders seem to have adopted a wait-and-see approach with carbon allowances. Slightly recovering at the end of the session, the EUA Dec.22 closed at 78.05€/t, -0.45€/t from Monday’s settlement.

On the policy side, the European Parliament plenary adopted the reform to extend the MSR 24% intake rate until 2030 instead of reversing it to 12% as the current design of the market plans. The proposal now have to be voted by the Council which opinion on the text expected to be presented during then next Environmental Council meeting scheduled on June 28th.

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