Day-ahead electricity prices in continental Europe continued their decline in February as mild weather tempered coal and natural gas usage and renewable energy generation escalated, according to data just released by Platts, a leading global energy, petrochemicals and metals information provider.
The Platts Continental Power Index* (CONTI) fell 5% in February to '38.28 per megawatt hour (/MWh) compared to the January level of '40.29/MWh. It was down nearly 16% from the December 2013 level.
Power price declines were most marked in Spain. Surging wind and hydro-electric power output resulted in day-ahead power prices averaging '16/MWh in over-the-counter trade for the month, less than half the equivalent average value in February 2013 of '44.79/MWh.
"A surge in renewable energy output was also seen in Germany, where wind and solar power continues to eat into conventional generation's market share," said Henry Edwardes-Evans, Platts associate editorial director of Platts Power in Europe.
Day-ahead peak power in Germany reached '50/MWh for just three days in February this year, compared to fifteen days in February a year ago, with solar generation exceeding 20 gigawatts (GW) February 24, a new record for this early in the year. German wind power output in February was 6.14 terawatt hours (TWh), 90% greater than a year ago, while solar power output at 1.63 TWh was up 167% versus February 2013.
"Given this data, it's no surprise that conventional generators are suffering, with German utility RWE reporting a net loss for 2013 for the first time in 60 years," added Edwardes-Evans.
In the natural gas market, the decline in U.K. day-ahead prices accelerated in February, with a 9.6% drop month over month following January's 6% drop from December.
"Mild, windy weather in February helped push average daily natural gas demand in the U.K. down by 17% year-over-year to 278 million cubic meters, the lowest level for the month since 2000," said Edwardes-Evans. "Platts' data shows U.K. wind output through February averaged 4.09 GW, exceeding the previous monthly record set in December 2013 by 7%."
At continental Europe's most liquid natural gas trading hub, the Dutch TTF, the average price of day-ahead natural gas was '23.80/MWh in February, down 9.2% from January.
"Following Russia's intervention in Crimea, U.K. and European prompt gas prices rose by as much as 10% in early March 3 trading, but over the following two days most of this 'Ukraine premium' was lost as underlying market fundamentals reasserted themselves," Edwardes-Evans noted.
*Platts Continental Power Index (CONTI) is a demand-weighted baseload average of day-ahead contracts assessed in Germany, Switzerland, France, Belgium and the Netherlands. The Platts U.K. assessments reflect day-ahead contracts assessed for firm delivery of power on the high voltage network of England, Wales and Scotland, and at the National Balancing Point for gas. The Platts assessments reflect prices as determined between buyer and seller in the open physical markets.
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