In the third week of October, European electricity market prices were stable, with an upward trend in most cases compared to the previous week. However, in the MIBEL market, prices fell due to high wind energy production, which reached an all time record in Portugal and the highest value so far in 2023 in Spain.
Solar photovoltaic, solar thermoelectric and wind energy production
In the week of October 16, solar energy production decreased in all major European markets compared to the previous week. The largest declines – 42% and 41% – were registered in the Iberian Peninsula and Italy, respectively. The smallest drop was registered in the German market at 11%.
For the week of October 23, according to AleaSoft Energy Forecasting’s solar energy production forecasts, solar energy production is expected to increase in all analyzed markets compared to the previous week.
The week of October 16 brought a week‑on‑week increase in wind energy production in most of the major European markets. The Portuguese and Spanish markets were the most prominent, with increases of 294% and 272%, respectively. In addition, on Tuesday, Oct. 17, the Portuguese market broke its all‑time record with a daily wind energy production of 108 GWh. During the same week, on Friday, Oct. 20, wind energy produced 420 GWh for the Spanish market – the highest value since December 2021. The German market was the only sector where wind energy production decreased and was 14% down compared to the previous week.
AleaSoft Energy Forecasting’s wind energy production forecasts indicate that levels will decrease in all analyzed markets except Italy for the week of October 23.
Electricity demand
During the week of October 16, electricity demand increased in most major European markets compared to the previous week. Increases ranged from 0.7% in the Dutch market to 6.4% in the British market. However, demand decreased in two Southern European markets. In Portugal, demand fell by 2.2% and, in Italy, by 1.1%.
During the same period, average temperatures decreased in all analyzed markets. The largest decrease, 5.6 C, was registered in Germany. In contrast, Spain and Italy registered the smallest temperature decreases, each by 2.3 C.
Demand is expected to increase in Portugal, Italy, Great Britain and the Netherlands and to decrease in Spain, Germany and Belgium for the week of October 23. In France, demand is expected to remain similar.
European electricity markets
In the week of October 16, prices in the main European electricity markets remained generally stable, with a certain upward trend compared to the previous week in most cases. However, in the MIBEL market of Spain and Portugal, prices fell by 37% and 38%, respectively. In the EPEX SPOT market of France, a slight decline of 1.2% was also registered. On the other hand, the largest percentage price rise, 141%, was reached in the Nord Pool market of the Nordic countries, while the smallest increase, 2.7%, was registered in the IPEX market of Italy. In the remaining markets, prices increased between 3.7% in the EPEX SPOT market of Belgium and 21% in the EPEX SPOT market of Germany.
In the third week of October, weekly averages were below €95 ($101.4)/MWh in most of the analyzed European electricity markets. The exceptions were the British and Italian markets, where prices were €103.08/MWh and €149.23/MWh, respectively. In contrast, the lowest average price, €22.29/MWh, was reached in the Nordic market. In the rest of the analyzed markets, prices ranged from €77.98/MWh in the Portuguese market to €94.45/MWh in the German market.
On October 16, the highest hourly prices in the week were registered in most of the analyzed European electricity markets. On that day, the TTF gas price in the spot market was the highest in the third week of October, exceeding €50/MWh. A price of €240.00/MWh was reached in the German, Belgian, French, Italian and Dutch markets from 19:00 to 20:00. This price was the highest since Aug. 24 in the French and Italian markets. The highest price since January was recorded in the N2EX market of the United Kingdom, on Oct. 16, from 19:00 to 20:00, and was £241.19/MWh. At that time on the same day, the highest price since January was registered in the Spanish market, which was €220.00/MWh.
Peak prices were not as high in Portuguese and Nordic markets. The highest prices were reached on Monday, Oct. 23. In the Portuguese market, a price of €215.02/MWh was registered from 20:00 to 21:00 – the highest price since the end of January. In the Nordic market, from 8:00 to 9:00, a price of €87.66/MWh was reached, the highest price since the end of June in this market.
During the week of October 16, the rise in the average price of gas, the increase in demand in most markets and the general decline in solar energy production led to higher prices in the European electricity markets. Wind energy production fell in the German market, contributing to the price increase in this market. On the other hand, the production with this technology increased considerably on the Iberian Peninsula and in France, leading to lower prices in the MIBEL and French markets.
AleaSoft Energy Forecasting’s price forecasts indicate that in the fourth week of October prices in most analyzed European electricity markets might increase. This could be influenced by lower wind energy production and higher demand in most markets.
Brent, fuels and CO2
In the third week of October, Brent oil futures for the Front‑Month in the ICE market registered their weekly minimum settlement price, $89.65/bbl, on Monday, Oct. 16. This price was 1.7% higher than the previous Monday. Subsequently, prices increased and by Wednesday settlement prices exceeded $90/bbl. The weekly maximum settlement price, $92.38/bbl, was reached on Thursday, Oct. 19. This price was 7.4% higher than the previous Thursday.
At the beginning of the third week of October, news of a possible lifting of sanctions on Venezuelan oil pushed Brent oil futures prices lower. But concerns about possible supply disruptions related to instability in the Middle East continued to exert an upward influence on prices.
As for settlement prices of TTF gas futures in the ICE market for the Front‑Month, on Monday, October 16, the weekly minimum settlement price, €48.47/MWh, was reached. But this price was 10% higher than the previous Monday. As a result, prices increased. The weekly maximum settlement price, €51.11/MWh, was reached on Friday, Oct. 20. However, this price was 5.3% lower than that of the previous Friday, which had been the highest since mid‑February.
In the third week of October, supply concerns related to instability in the Middle East continued, causing settlement prices of these futures to remain above €48/MWh. However, forecasts of mild temperatures, abundant supply and high levels of European stocks allowed settlement prices to remain below the maximum price reached in the previous week.
As for settlement prices of CO2 emission rights futures in the EEX market for the reference contract of December 2023, during the third week of October, they registered a downward trend. The weekly maximum settlement price, €83.35/t, was reached on Monday, October 16, and it was 2.0% higher than on the previous Monday. However, as a result of the declines registered during the week, the weekly minimum settlement price, €81.41/t, was registered on Friday, October 20. This price was 5.3% lower than on the same day of the previous week.
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