High temperatures and increased demand

Last week, temperatures remained above average in most European countries, with exceptionally high temperatures for this time of year. Sunday, September 1st, was the warmest September 1st on record in the Netherlands. As a result, solar generation was particularly strong for this time of year. The Netherlands experienced slightly more wind over the weekend, and Germany also saw a brief increase in wind generation on Sunday. Consequently, weekend prices fell to as low as -40 €/MWh in the afternoon.
As August drew to a close, demand increased in various countries, with temperature sensitivity becoming more pronounced. All of the factors mentioned above led to higher power prices, especially in the evenings. Spot prices in both the Netherlands and Germany consistently exceeded 200 €/MWh during the evening peak. The price patterns indicate that gas and coal power plants were again marginal for most of the weekdays. Most plants shut down in the afternoon, while many continued operating overnight. The average spot price was 87.8 €/MWh, an increase of over 30 euros compared to the previous week. The day-ahead gas price rose by about one euro, averaging 38.1 €/MWh.
Gas prices for the coming months also edged up after a decline the previous week. The September contract increased by nearly 3 euros, reaching 39.5 €/MWh. CO2 prices dropped by almost one euro, closing at 70.3 €/EUA.

In Germany, the energy regulator has decided that starting from next year, grid costs in areas with high renewable energy production will be more equally distributed. Grid operators will be allowed to allocate the “additional” costs associated with this generation elsewhere. Germany generates a lot of power with its wind farms in the north, while much of the (industrial) consumption occurs in the south. Areas with higher solar capacity also often face higher grid tariffs. Furthermore, Germany published a new version of its national climate and energy plan last week, estimating that the country will consume around 750 TWh of power by 2030. In recent years, total consumption was significantly lower due to COVID-19 and high gas and power prices. The total demand in 2023 was 517 TWh according to Destatis.
For next year, Dutch power became about one euro more expensive, closing at 93.1 €/MWh. TTF gas also rose by one euro, closing at 40.9 €/MWh. CO2 settled at 72.8 €/EUA.

Weekly changes