Difference in production costs between gas and coal-fired power plants is increasing

Last week, we once again saw the gas prices decline. The coal price also dropped. Nevertheless, we see the difference in production costs between gas and coal-fired power plants increasing. Currently, most gas-fired power plants are cheaper than many coal-fired power plants.
Last week was very sunny with scattered winds. The power generation by wind farms is starting to decrease more and more around this time of the year. Solar power generation causes prices to further decrease during the afternoon hours, which results in many conventional power plants being forced to operate at a limited capacity or shut down completely. Gas-fired power plants were often the marginal plants outside of the afternoon hours. In France, temperatures were around the seasonal average, which means there was no significant increase in electricity demand due to air conditioning. Consequently, we observed the French spot prices declining and even falling below the German prices.

An abundance of solar power generation caused the Dutch spot prices to be very negative last weekend. One hour on Saturday dropped to -200 €/MWh and on Sunday one hour even ended at -400 €/MWh. The average weekly spot price ultimately amounted to 62.4 €/MWh, nearly 10 euros lower than the previous week.
As mentioned earlier, the gas price decreased. June closed nearly 6 euros lower at 24.5 €/MWh. July closed at 25 €/MWh.
CO2 prices also declined. The contract for December 2023 dropped by almost 8 euros and settled at 82.3 €/EUA.
Given that gas, coal, and CO2 became considerably cheaper, the Dutch power contracts for the coming months also fell. June fell by 12 euros and closed at 73.7 €/MWh. July ended at 76.3 €/MWh.

The prices of long-term contracts also decreased. For next year, gas dropped by just under 6 euros and closed at 44.6 €/MWh. CO2 became almost 8 euros cheaper and ended at 86.5 €/EUA. The Dutch electricity contract became significantly cheaper, closing almost 14 euros lower at 109.4 €/MWh. For next year, the CSS barely moved and was at -6.7 €/MWh. The CDS dropped by over 2 euros and reached -0.1 €/MWh.

Weekly changes