German government reaches agreement on faster solar expansion

Last week, the gas price briefly rose above 33 €/MWh. The situation in the Middle East remains tense, with reports suggesting that Israel briefly attacked Iran on Friday night. A few hours later, the gas price opened slightly higher but then fell back. Ultimately, the price for the May gas contract remained unchanged from the previous week, closing at 30.8 €/MWh.
Last week once again saw strong winds leading to above-average wind generation on most days. However, solar generation remained relatively limited. Sunny days have been scarce in The Netherlands so far this year. Toward the end of the week, renewable generation began to decrease. The average Dutch spot price was 64.9 €/MWh, nearly 16 euros higher than the previous week.
For the coming months, gas prices remained unchanged. CO2, which had surged two weeks ago, dropped by nearly 3 euros, with the December 2024 contract closing at 68.8 €/EUA. The Dutch power contract for May saw little movement, while June and July closed slightly lower at 63.8 and 67.9 €/MWh, respectively.

The German government reached an agreement last week on a legislative package aimed at accelerating the expansion of solar capacity. The plan includes making more land available for solar installations and increasing the size of solar energy tenders. Germany had about 82 GW of installed solar capacity at the end of 2023, but it will need to add about 20 GW annually to meet its 2030 climate target of 215 GW. Last year, around 14 GW was added.
Germany’s grid regulator is also exploring how to manage the increase in installed renewable energy capacity. Like The Netherlands, Germany is facing growing congestion issues, with most generation occurring in the north while consumption is highest in the south. As a result, wind farms are increasingly required to limit their production. It will now explore ways to use the power instead of curtailing it.
For next year, the gas price ultimately dropped by one and a half euros to 34.5 €/MWh. CO2 fell by almost 3 euros to 71.5 €/EUA. The Dutch electricity contract for 2025 dropped by a little over 4 euros, closing at 84.3 €/MWh. The clean spark spread worsened by 70 eurocents, ending at -7 €/MWh by the end of the week.