Neutral carbon and easing power prices

The NWE power spot prices observed mixed variations yesterday, the French prices strongly correcting downward from its peak amid forecasts of lower demand and improved nuclear availability while the German prices went back up and above the clean coal costs supported by the weaker wind production expected today. Prices in Belgium followed the French ones with additional pressure from the return of the Tihange-3 unit, whereas in the Netherlands the day-ahead prices were seen slightly up due to the lower wind output. Largely uncoupled, the day-ahead prices averaged 228.77€/MWh in the four countries, -37.45€/MWh day-on-day.

The power prices posted significant losses along the curve, driven by the falling gas prices as the concerns over Russia’s demand of gas payment in rubles faded while sustained gas pipeline supply and forecasts of warm and windy weather provided additional pressure.

The carbon prices once again traded rangebound to end flat from the previous session with low exchanged volumes as the market stayed quiet, waiting for signals from the gas market and Russia-Ukraine conflict. After a slightly bearish opening, the EUA benchmark contract rebounded by nearly 2€/t in the aftermath of a particularly strong auction result, the primary market’s sale clearing with a 15-cent premium over the secondary market and with a way above-average 2.65 cover ratio. Prices however gave back the gains in the afternoon and the EUA Dec.22 eventually closed at 78.50€/t, only 1-cent above Friday’s settlement.