Persistent Drought: water levels Rhine in Germany continue to slide

Last week, we experienced high temperatures and limited wind generation in Northwestern Europe, which led to generally higher prices. During the afternoon hours, prices often closed around the variable costs of gas-fired power plants, with the exception of the weekend when prices reached around 0 €/MWh at various hours.
Due to the rising temperatures, water levels in the Rhine River in Germany are decreasing. At Kaub, an important reference point, the water level was around 130 cm. Last year, the water level was at a similar level during this time. However, it is significantly below the average of the past 5 years. Freight ships are already being forced to limit their loads and charge higher transportation costs. Last August, the water level eventually dropped to around 30 cm due to the heatwaves in Europe, which limited the supply of some coal-fired power plants in Germany, leading to reduced production. ENTSO-E, the European Network of Transmission System Operators for Electricity, recently highlighted in their summer outlook that low river levels may pose a risk for Germany this summer.
Gas prices for the upcoming months decreased last week. Both July and August became approximately 2.5 euros cheaper, closing at 32.5 €/MWh and 32.9 €/MWh, respectively. CO2 became 4.5 euros cheaper, closing at 87.9 €/EUA. Dutch electricity contracts also declined: July decreased by 8 euros, closing at 92.5 €/MWh, while August closed 9 euros lower at 93 €/MWh.

The gas price for next year remained more or less unchanged, closing just 20 cents lower at 50.9 €/MWh. CO2 became 4.5 euros cheaper and settled at 92.2 €/EUA. The Dutch power price for 2024 decreased by 3 euros and settled at 127.8 €/MWh.
The spark spread for next year worsened by 1 euro and ultimately reached -2.3 €/MWh. The dark spread improved by 80 euro cents and reached 8.4 €/MWh.

Weekly changes