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European power prices edge up on cold start to April, French strike extension


German April recovers above Eur100/MWh

French Cal 24 moves above Eur200/MWh

Italian, British net power imports keep rising

  • Author
  • Kira Savcenko    Fatemeh Zahedi    Daria Dabiri    Maxim Grama    Andreas Franke
  • Editor
  • Henry Edwardes-Evans
  • Commodity
  • Coal Electric Power Energy Transition LNG Natural Gas

European power prices edged up in late March as colder, calmer weather forecasts combined with renewed French nuclear availability issues, but prior to this prices had fallen to 18-month lows.

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German April power traded March 31 around Eur110/MWh after settling March 20 at Eur95.38/MWh, a level not seen since Aug. 2021, EEX data showed.

In France, nuclear risk premiums reemerged for next winter as strikes by EDF workers delayed reactor maintenance with year-ahead power rising above Eur200/MWh and Q1 2024 above Eur400/MWh.

Gas, coal and carbon allowance prices also rebounded with strikes impacting LNG sendouts in Europe's biggest LNG import nation at three French import terminals.

Platts, a unit of S&P Global Commodity Insights, last assessed TTF front-month gas at Eur43.28/MWh on March 30.

The contract was assessed below Eur40/MWh on March 20 for the first time since July 2021.

European coal prices followed with CIF ARA year-ahead rebounding to $142.50/mt despite little pressure on demand as falling gas generation costs sidelined older coal units with overall prices seen converging.

Carbon allowance prices inched slightly higher, but remained below record-highs seen early March.

High wind, low demand

In Germany, day-ahead averaged Eur89.7/MWh March 17-30, down 16% over the fortnight and some 57% below the same period last year, exchange data showed.

April baseload settled at Eur104.96/MWh March 30 on EEX, up 3% over the fortnight.

Bearish pressure from robust wind generation and a seasonal decline in demand were the main downward drivers offset by ongoing strikes in France.

"Too little of the risks was priced in," a trader said, citing French nuclear along with the EU's initiative on joint gas purchases as bullish drivers.

TTF April gas rebounded above Eur45/MWh March 31, up 8% from levels seen two weeks earlier.

"Most of the bearishness was just priced in. That's why the front was only below Eur40/MWh two times," the trader added.

Further out, German Cal-24 power settled at Eur143.63/MWh March 30, up 5% compared to two weeks ago with its discount to France widening as French forward prices rallied.

French forwards rally

French prompt prices were mostly bearish this March despite strikes by French energy workers going into a fifth week with EDF extending the walkouts to April 6.

"There's still the French nuclear reactors that haven't started their outage and are pushing their restarts later into September and the ones that are still waiting to return," a trader said.

Nuclear output fell 19% in March to average 34 GW, according to RTE.

In addition, concerns about extra inspections required by safety regulator ASN after EDF disclosed three new cracks on March 6 added bullish moment for next winter.

French Q1 2024 traded March 31 above Eur400/MWh, up over 80% since March 6, EEX data showed.

Calendar 2024 rose 46% during the same period to Eur216/MWh.

"People are reluctant to sell due to pending news from ASN, so naturally the price and risk premium will creep up," another trader said.

French day-ahead averaged Eur112/MWh in March, down 25% from February as demand fell 12% to average 53 GW.

"All down due to fundamental factors," a Swiss trader said. "Temperatures are briefly below average but they recover, so no reason for panicking. It is spring now."

Gas-fired generation fell 34% to 4.7 GW with strikes also impacting French gas, coal and hydro plant.

Wind meanwhile rose 53% to average 7 GW following a new record above 16 GW, while combined wind and solar peaked March 31 around 21 GW.

Despite reduced nuclear, France was seen mostly as a net exporter sending power to Italy, Switzerland and Britain.

Spanish cap extension

In Spain, power prices were bearish during March, as high wind and mild temperatures curbed consumption.

An extension to the gas-for-power price cap to end-2023 added to the bearish sentiment.

Market participants however showed conflicting views on the relevance of the cap.

Some suggested with the current reduced gas prices the need for the cap has diminished, while others argued the winter season still holds the risk of high gas prices if Europe faces supply issues.

Average day-ahead prices declined 33% to Eur89.61/MWh for the month of March, OMIE data showed.

Similarly, the April contract settled at Eur76.88/MWh on March 30, down 30% from the last day of February.

Gas generation fell 38% to 3.6 TWh, while wind output rose 26% to 8.6 TWh, REE data showed.

Italian imports near 6 GW

Italian day-ahead averaged Eur130.78/MWh in the second half of March, down 9% over the fortnight amid mild weather and strong imports.

Wind generation fell 1 GW to 2.7 GW, while solar rose 0.6 GW to 3.2 GW, Terna data showed.

Hydro generation was flat averaging 2.4. GW, while thermal generation fell 1.8 GW to average 15.9 GW.

Net imports increased 0.6 GW to average almost 6 GW, with flows from France rising to 2.4 GW.

Swiss imports remained at 2 GW.

April was last seen trading at Eur133.75/MWh March 31, down 4% from March 1.

British imports near 4 GW

Average UK day-ahead baseload fell 17% month-on-month in March to average Eur114.72/MWh, down from Eur139/MWh in February, S&P Global data showed.

Wind averaged 8.6 GW, down 12% from February, according to BMRS data.

Gas generation averaged 11.4 GW in March, up 1% on the month, while nuclear rebounded to 4 GW.

Net imports rose 6% to 3.8 GW.

French imports rose 42% to average of 1.7 GW amid frequent swings on the 4 GW of transmission capacity.

Belgian imports reached 0.6 GW, while Dutch flows averaged 0.8 GW.

Norwegian imports ramped down 8% to 1.1 GW after Norway restricted flows on the NSL link.