National Energy System Plan (2050): emphasis on hydrogen, achieving self-sufficiency in CO2-free power production, and earlier deployment of CCS.

Last week, several lignite power plants had to exit the German power market. These plants, with a total capacity of around 2 GW, were temporarily allowed to return to the German electricity market from October last year until the end of June this year. Surprisingly, the Minister of Economic Affairs and Climate, Robert Habeck, indicated last month that these plants will likely be needed again next winter. At the beginning of last week, there was strong wind generation in Northwest Europe, resulting in a significant amount of wind power in both Germany and the Netherlands. Solar generation was around the seasonal average. From Monday to Wednesday, we quickly saw prices drop towards zero. However, towards the end of the workweek, temperatures sharply rose, and the residual demand was much higher. The majority of this demand was met by gas-fired power plants. The average Dutch spot price last week was 82.9 €/MWh, which was more than 12 euros higher than the previous week. Gas contracts for the upcoming months have been trading between 30 and 40 €/MWh for a while now. Last week, the contracts closed slightly lower. For instance, August became around 3.5 euros cheaper, closing at 33.5 €/MWh. September closed 3 euros lower at 35.4 €/MWh.
CO2 also decreased by 3 euros: the December contract ultimately ended the week at 86.2 €/EUA.
Dutch power contracts for August and September became significantly cheaper. August dropped by almost 11 euros, closing at 89 €/MWh. September decreased by nearly 13 euros and ended the week at 99.3 €/MWh.

Last week, a draft version of the National Energy System Plan (NPE) 2050 was presented to the Dutch House of Representatives. The NPE assumes the highest demand scenario and emphasizes the need for The Netherlands to become less dependent on energy from abroad: national production of CO2-free power should meet national demand. Additionally, the government aims for a timely rollout of carbon capture and storage (CCS) technologies to achieve the intended emission reductions. Sustainable energy projects should also receive permits more quickly. Due to the current nitrogen issue, many projects have been stalled for a considerable period. It is worth noting that the gas price for next year slightly increased. The contract for 2024 became around 2 euros more expensive, closing at 54.7 €/MWh. CO2 became about 3 euros cheaper and ended the week at 90.7 €/EUA. The Dutch power contract for next year became slightly cheaper: it increased by only 80 euro cents, closing at 133.8 €/MWh. The CSS worsened by 2 euros and ultimately reached -3.2 €/MWh. Coal prices decreased slightly, improving the CDS by almost 5 euros. The CDS ended at 13.9 €/MWh.

Weekly changes