Gas prices continue to fall despite a drop in temperatures around the continent

Last week we discussed that CO2 is becoming more expensive while the price of gas continues to fall. In this week’s market report, we take a closer look at the price of gas that continues to fall despite a drop in temperatures around the continent.

Robust wind generation combined with decent solar generation pushed power prices lower in the CWE region last week. In the mainland, the renewable generation was particularly high during the weekend and thus pushed the residual load to low levels. For instance, the residual load in the Netherlands for one of the afternoon hours on Sunday were close to just 1GW.

Last week the average weekly Dutch power price dropped to 124.1 €/MWh, a €5 decrease from the previous week. Even with a drop in temperatures in the majority of the continent, the day-ahead gas prices continued to fall. The average day-ahead gas price also dropped to 50.5 €/MWh. This is around €3 lower than the previous week. This might be due to the increased renewable generation. The front-month gas contract was on average 51 €/MWh which was €2 higher than the previous week. This uptick might be due to the latest long-term weather forecast showing temperatures to be below the seasonal norm for the majority of days in March.  The April gas contract was on average 50.8 €/MWh which was €1.2 higher compared to the week earlier. The December 2023 CO2 price increased on average to 98 €/EUA.

The front-month Dutch power prices also increased and were on average 132.6 €/MWh. This is around €6 higher than the previous week. The April contract increased by €1.7 and was on average 125.8 €/MWh.

Last week saw the clean spark spread (CSS) in the positive territory for the front month, but it still remains negative for April. The CSS was 0.8 and -5.6 for March and April respectively.

France is currently seeking a pro-nuclear alliance for EU energy talks. This move arises due to the growing dispute between France and other pro-nuclear countries who wants the EU policies to promote nuclear a low-carbon energy source, and those who are against such moves. The meeting is said to happen on Tuesday and it is led by the French energy minister. The primary focus will be on the contribution of nuclear energy to energy security and climate goals of the continent.

For 2024 gas prices did not show any major movements and closed at 56.6 €/MWh. Carbon increased by €1.4 and cleared at 102.4 €/EUA. The 2024 Dutch power price contract dropped by €3.7 and closed at 143.5 €/MWh. The CSS went down by €4.2 and went negative to -0.8 €/MWh.

Weekly changes