Futures curve prices recover with gas and carbon costs

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PARIS — European futures curve power prices climbed on Monday, with first-year French and German contracts for the third and fourth quarters of 2023 hitting record highs, following higher gas prices and carbon permits.

Prior to the recent price spike, gas purchases accounted for less than 1% of EU gross domestic product. Currently, the gas load is close to 5%, according to Societe Generale analysts.

« This is unprecedented and at a percentage level close to the ‘oil load’ we experienced in 2008, » they said, adding that in the months to come, and possibly for years to come, the burden of gas would be a powerful brake for Europe. economy.

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Germany’s benchmark baseload power for delivery in 2023 rose 6.3% to 384.75 euros per megawatt-hour (MWh) at 3:11 p.m. GMT, just below a contract high of 387 euros earlier.

The first-year French contract reached a contractual high of 508 euros/MWh, up 2%.

German contracts in the third and fourth quarters of 2023 also reached contract highs of 336 euros and 398 euros respectively.

European CO2 allowances for the December 2022 expiry increased by 2.8% to 80.75 euros per tonne.

A Kremlin spokesman said there was little Russia could do to help with urgently needed repairs to faulty equipment on the Nord Stream 1 gas pipeline following further declines in Gazprom’s production and exports.

German holding company KSBG plans to sell utility Steag, hoping to put an end to coal-fired power generation which has become a financial burden in recent years.

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Spot prices fell as solar supply in Germany and nuclear availability in France were expected to rise on Tuesday.

German base load on Friday fell 2.69% to 425 euros/MWh.

The French equivalent price fell by 7.2% to 492 euros/MWh.

Solar supply in Germany is expected to increase by 1.7 gigawatts (GW) to 11.8 GW, according to data from Refinitiv Eikon.

The 1.3 GW restart of Belleville 1 in France has been brought forward by a day to August 1, while two other reactors totaling 1.8 GW are expected to return from maintenance by Tuesday.

Demand is expected to increase by 1.9 GW to 55.9 GW in Germany on Tuesday and gain 1.3 GW to 46.2 GW in France, the data showed. (Reporting by Forrest Crellin editing by Mark Potter)