European Electricity Prices Surge as solar and Wind Output dips
Brussels,October 13,2024 - A notable drop in renewable energy generation across Europe is driving a sharp increase in wholesale electricity prices,according to analysis from AleaSoft Energy Forecasting. Teh trend, observed throughout the second week of October, highlights the ongoing vulnerability of European power markets to fluctuations in whether-dependent energy sources.
Brent oil futures on the ICE market remained below $67 per barrel during the period, reaching a weekly high of $66.25/bbl on october 8th before falling to a weekly low of $62.73/bbl on October 10th following a 3.8% decline. This price represented a 2.8% decrease from the previous Friday and the lowest level since May 8th. Easing tensions in the Middle East and a build-up of US crude oil stockpiles contributed to the downward pressure, alongside concerns over escalating trade tensions between the US and China which could dampen economic activity and energy demand.
Meanwhile, TTF gas futures on the ICE market experienced volatility. Prices exceeded €33/MWh on october 6th and 7th,peaking at €33.25/MWh on October 7th - the highest price since August 27th. However,prices retreated in the latter part of the week,closing at €32.17/MWh on October 10th, still 2.3% higher than the previous Friday. Despite continued Russian attacks on Ukrainian gas infrastructure, high European gas reserve levels – averaging over 83%, and exceeding 90% in some countries – helped to limit price increases.
The price of CO2 emission rights futures on the EX Market also saw movement.After reaching a weekly low of €78.30/t on October 7th, prices recovered to a weekly high of €79.69/t on October 10th, a 0.7% increase from the previous Friday and the highest price as February 15th.
These market dynamics, as analyzed by AleaSoft Energy Forecasting, underscore the critical role of diverse energy sources in maintaining stable and affordable electricity supplies across europe.The recent price increases are directly linked to reduced output from solar and wind farms, demonstrating the need for continued investment in both renewable infrastructure and reliable baseload power generation to ensure energy security.
[image of AleaSoft – Brent CO2 gas carbon prices chart]
Source: Prepared by AleaSoft Energy Forecasting using data from ICE and EEX.
