Platts: European Power Prices Fell 8.4% in March as German Solar Ramped Up
Natural Gas Prices Declined Again in U.K. and Continental Europe on Mild Weather

April 8, 2014

Day-ahead electricity prices in continental Europe recorded a fifth consecutive monthly decline in March as surging German solar and wind output helped chase prices lower in neighboring countries, according to data just released by Platts, a leading global energy, petrochemicals and metals information provider.

The Platts Continental Power Index* (CONTI) fell 8.4% in March to '35.06 per megawatt hour (/MWh) compared to the February level of '38.28/MWh. The index is down more than 39% since peaking at '50.50/MWh in November last year.

'A mid-March surge in German wind output followed seven days of peak solar output, which rose above 20 gigawatts (GW) to a new monthly record of 23 GW on March 20,' said Andreas Franke, Platts managing editor, European power and gas.

'German power prices for March 16 delivery turned negative as wind power output rose above 24-GW combined with stronger solar production,' Franke said. 'Further along the curve, German year-ahead power prices fell below '34/MWh in March for the first time in more than nine years as the price CO2 fell drastically and coal prices retreated.'

Outside of Germany's immediate influence, near-term power prices in the United Kingdom and Italy declined as natural gas prices weakened, aided by falling coal and CO2 prices.

In the natural gas market, U.K. day-ahead prices fell again in March, down 4% after a 9.6% drop in February. Early April price saw further declines, to levels not seen since 2011, as the unusually mild winter gave way to warm early spring weather.

'U.K. natural gas prices are down 35% year-over-year,' said Nathan Richardson, Platts associate editor. 'Last year we had a late cold snap that drove gas storage levels down to around 3% of total capacity, while today those levels are already more than 52% ahead of the summer injection season.'

At continental Europe's most liquid natural gas trading hub, the Dutch TTF, the average price of day-ahead natural gas was '22.76/MWh in March, down 4% on February and down 29% year-over-year.

'The decline has accelerated in recent days,' Richardson said. 'TTF prompt delivery gas has dropped below '20/MWh in early April trade, the first time we've seen it this low since December 2011. Norwegian gas flows have been healthy and demand for heat and storage have been low.'

In addition to the Platts Conti Indexes, Platts publishes the Platts Pan-European Power (PEP) Index, also a demand-weighted day-ahead base load index indicating price trends for Europe's free electricity markets as a whole. Europe is moving towards a continental market model, and while transmission constraints mean the reality may be some way off, these indices address the industry's need for representative, Europe-wide indices.

Visit the methodology and specifications webpage for more information on electric power or the methodology used by Platts in its power assessments.

About Platts

Founded in 1909, Platts is a leading global provider of energy, petrochemicals, metals and agriculture information and a premier source of benchmark prices for the physical and futures markets. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 180 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets. A division of McGraw Hill Financial (NYSE: MHFI), Platts is headquartered in New York with approximately 900 employees in more than 15 offices worldwide. Additional information is available at http://www.platts.com.

About McGraw Hill Financial

McGraw Hill Financial (NYSE: MHFI), a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power and McGraw Hill Construction. The Company has approximately 17,000 employees in 27 countries. Additional information is available at www.mhfi.com.

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