German, U.K. Wind Records Drove Down January European Power Prices

Screen Shot 2015-02-11 at 13.39.56Platts, which used to be called Platts Oil News,  just released an analysis of  European day-ahead electricity prices trending sharply lower in January as wind power generation posted new records in Germany and the U.K..   Platts, which was founded in 1909  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.

The Platts Continental Power (CONTI) Index  fell 7.44% in January to €35.81 per megawatt hour (/MWh) compared to December 2014’s €38.69/MWh. The Index was down 11.12% compared to January 2014’s €40.29/MWh.

Platts’ regional analysis of European power and gas markets in January showed the following:

Germany: Day-ahead power prices averaged €29.15/MWh, down 13% from December and down 20% from January 2014. Wind output reached a new monthly record for a second month in a row, up 52% year-over-year at 9.44 terawatt hours (TWh), according to grid operator data compiled by Platts PowerVision.

France: Day-ahead power prices averaged €39.72/MWh, down 3% from December but up 3% compared with this time a year ago. Electricite de France (EDF)’s nuclear generation remained strong through January, only dipping below 60 gigawatts (GW) from week 5 commencing January 26 as a second of the company’s 58 reactors entered a maintenance period.

U.K.: Having fallen 7% in December, U.K. day-ahead power prices fell again in January, this time by 10% to £39.14/MWh. The year-over-year decline was 17%. Natural gas prices fell 14% from December and were down 29% year-over-year. The wind sector had its most productive month ever, generating 4.13 TWh, some 14% of U.K. electricity.

Netherlands: On the Dutch TTF, continental Europe’s most liquid natural gas hub, day-ahead gas prices fell 12% month-over-month, and were a full 25% below January 2014 levels.
“German wind output exceeded nuclear generation for a second month in a row,” said Andreas Franke, Platts managing editor of European power. “More relevant to those having to manage the grid, however, is the extreme volatility of wind demonstrated last month. Output fell from a new record of 31 GW January 9 down to 0.2 GW at times in week 4 commencing January 19.”

The U.K. saw weekly, monthly and half-hourly wind generation records exceeded as installed capacity topped 12 GW, according to trade association RenewableUK. The half-hourly record on January 2 saw wind supply 31% of Britain’s electricity demand. By late January, however, much colder, stiller weather conditions saw natural gas, coal and nuclear plant resume dominance of the generation mix as winter demand peaked at 53 GW.

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