Forwards barely move

Last week, there was virtually no wind in the Netherlands and Germany. Only from Saturday evening did we see wind generation briefly increase. Solar generation was modest at the beginning of the week, but towards the end of the week, solar output increased significantly. Especially on Sunday, the combination of wind and solar resulted in very negative prices. The Dutch baseload price averaged -8 €/MWh that day, with prices dropping to -200 €/MWh during the afternoon hours. Emergency power was called upon for an hour due to the surplus of power. Despite very negative prices over the weekend, the average weekly spot price was 62.8 €/MWh, making last week one euro more expensive than the previous week. From Monday to Friday, gas and coal-fired power plants were mainly marginal, except during the afternoon hours. Power demand on Thursday was also very low due to Ascension Day. Friday is a bridge day in many countries, so demand was also lower than usual. Gas prices remained stable: TTF lost 50 cents, and the price for June and July closed at 30 and 30.2 €/MWh, respectively. CO2 remained around 72 euros, the same level where it closed a week earlier. Dutch baseload forwards barely moved: June remained unchanged at 64.9 €/MWh. July dropped by one euro to 68.2 €/MWh.

During a consultation session with the German government, various parties warned about Germany’s (future) dependence on power imports from abroad. Germany closed its last nuclear power plants last year and excluded a significant amount of coal capacity from the wholesale market at the end of the first quarter of this year. The German government has previously indicated plans to build new gas-fired power plants. The country is increasingly facing congestion issues because power demand is mainly concentrated in the south, while generation (especially wind) occurs in the north. Netherlands is also increasingly dealing with grid congestion. TenneT has previously stated it is looking for solutions, one of which is limiting import/export capacities with Belgium and Germany, as announced by Minister Jetten at the end of April. For next year, the prices of CO2 and gas remained unchanged. Gas closed at 35.2 €/MWh. CO2 ended the week at 74.8 €/EUA. The CAL25 contract for Dutch power increased by one euro to 87.8 €/MWh.