Power prices hit new records amid spiking gas prices and stronger emissions

The European power spot prices surged above 180€/MWh yesterday, driven up by the sky-rocketing gas prices, higher EUAs, and the forecasts of stronger demand and dropping renewable generation for the upcoming hours. The day-ahead prices averaged 182.54€/MWh in Germany, France, Belgium and the Netherlands, +22.81€/MWh day-on-day.

The spiking gas prompt prices buoyed the carbon market as well, the EUA prices posting gains throughout the day with the Dec.21 contract climbing up to 33-cent below last week’s all time high of 65.77€/t. As usual with such kind of bullish session, the benchmark contract slightly eased at the end of the day to notch a 2.1% daily gains by closing at 64.72€/t, marking a much slower increase than the other energy markets. The carbon prices are however strongly correcting this morning, likely pressured the declaration from the EU energy Commissioner a few minutes ago that the EC is analyzing the Member States’ proposals to limit the energy prices’ surge, and possibly some profit taking following the 3-day rise of CO2 prices.

The power market was not spared by the endless rally of the fuels prices and extended massive gains along the curve, most contracts hitting new records. The front months contracts were the most impacted with the deliveries up to March 2022 marking more than 40€/MWh daily gains.