Strong gas pushes EU power curves higher, spot plunges on mild and windy weather

Spot power prices were sharply down in NW Europe on Tuesday on expectations of a jump in German wind power generation from 6.5 GW on Tuesday to 24 GW on Thursday (see graph of the day) and the continuation of below-average temperatures for the coming week. Overall, day-ahead prices for today reached 72.27€/MWh on average in Germany, France, Belgium and the Netherlands, down 13.68€/MWh day-on-day. On the curve, strong gas prices on the back of low storage levels and limited LNG supply pushed most power contracts higher. EUA prices traded as high as €53.78/t intraday but finally fell towards the close.

EUA prices could remain rangebound today as fundamentals are mixed with reduced auction supply but free allocations starting to be delivered to industrial players in August, notably in Germany and the Netherlands. The result of the bi-weekly UKA auction at 14:00 UK time could provide some direction. Overall, the EUA Dec 21 contract could find some technical resistance on its 20-day moving average in the very short term. Steady gas prices should continue to be supportive for power curve prices.