The wind energy production increased this week in all European markets, which together with lower demand led to lower prices in all markets of the continent. The prices are expected to rise next week as a result of colder temperatures and lower wind energy production.
Courtesy of NREL
Photovoltaic and solar thermal energy production, wind energy production and electricity demand
In the first three days of this week the average solar energy production in the Iberian Peninsula was 34% higher than the average of the previous week. In Italy the increase over last week was 13%. On the other hand, in France, the solar energy production was similar on average to that of last week. While in Germany, the average of the first three days of this week was 24% lower than the average of last week.
The production of this month of January 2020, until Wednesday, January 29, increased in all European markets compared to the same period of last year. The most important rises occurred in Germany and Italy, with increases of 55% and 19% respectively.
AleaSoft expects this week's solar energy production to be lower than that of last week in Germany and similar to that of the previous week in Italy. During the next week the production is expected to increase in the markets of Germany and Italy and to exceed this week's total production.
The average wind energy production of the first three days of this week increased in general compared to last week's average. The most important increase occurred in the German market, where the average production went from 221 GWh of last week to 739 GWh of the first three days of this week.
So far in January 2020, the wind energy production decreased by 26% in Italy and by 17% in the Iberian Peninsula. In Germany, it rose 1.2% and in France the increase was 36%.
AleaSoft expects that at the end of this week the wind energy generation will exceed that of last week in all analyzed markets. The most important increases are expected in Germany and France. On the other hand, for the next week it is expected that the wind energy production will decrease in general compared to this week.
The electricity demand decreased the first three days of this week compared to the same days of the previous week in most of the analyzed countries, except Germany and Portugal, where it increased by 2.8% and 0.4% respectively. In the rest of the countries the declines were between 8.8% of France and 1.1% of Italy. During the rest of the week, the demand is expected to continue falling due to the temperatures that will be less cold and the effect of the weekend. Next week, the demand is expected to increase with lower temperatures starting next Tuesday.
Mainland Spain, photovoltaic and solar thermal energy production and wind energy production
The average solar energy production in Spain, which includes photovoltaic and solar thermal energy, increased by 5 GWh from Monday to Wednesday of this week compared to the average of the previous week, which represented an increase of 42%. Regarding the year-on-year variation registered in the first 29 days of the month of January, the increase was 5.6%.
The average wind energy production of the first three days of this week exceeded the average of last week by 40%. However, so far this month there was a 21% year-on-year drop in production with this technology.
The electricity demand of Mainland Spain the first three days of this week decreased 6.2% compared to last week.
On the other hand, the nuclear power plants continue to operate and the nuclear energy production remains around 170 GWh per day.
European electricity markets
In the first four days of this week, the European electricity markets prices decreased in general compared to the same days of the previous week, as we anticipated earlier this week. The EPEX SPOT markets of Germany, France, Belgium and the Netherlands were those with the greatest variation, with decreases between 24% and 28%. These markets had average prices ranging from €33.79/MWh of the German market and €36.29/MWh of the French market. On the other hand, the Nord Pool market of the Nordic countries, despite being the market with the lowest average price so far this week, of €21.30/MWh, was the one with the lowest decrease, of 0.4%. Meanwhile, the IPEX market of Italy was the one with the highest price in Europe, with an average of €45.84/MWh and a decrease of 6.4%. The N2EX market of Great Britain with a variation of 16% was the second market with the highest prices, averaging a price of €41.14/MWh.
So far this week, the markets were quite decoupled between them and the daily prices of most of them were between €30/MWh and €40/MWh. The exceptions were the Italian market, where the daily prices were above €44/MWh, which made it recover its position as the market with the highest prices, and the market of the Nordic countries, with prices around €21/MWh, continuing as the market with the lowest prices in the continent.
According to the analysis carried out by AleaSoft, the decrease in prices during this week is due to the increase in wind energy production in general on the continent, as well as the decrease in electricity demand due to the less cold temperatures registered.
AleaSoft expects that in the rest of the days of this week the prices of most European markets will continue to fall due to lower demand and less cold temperatures over the weekend. The prices are expected to increase next week, as temperatures will fall again, which will lead to an increase in electricity demand in most markets. However, it is expected that next week the prices will not reach the level of the week of January 20 in which several days the prices were around €50/MWh.
Source: Prepared by AleaSoft using data from ICE and EEX.