Power prices increase following rising temperatures and gas prices

Last week, we witnessed average temperatures rising in Europe, coupled with lower wind generation. From Thursday onwards solar generation also decreased, leading to a relatively higher residual demand for power compared to previous weeks. This contributed to mostly positive clean spark spreads from Monday to Friday. The average Dutch power price was about 30 euros higher than the previous week, at 97.1 €/MWh.
Uncertainty surrounding LNG supply persisted due to announced strikes at a major LNG producer in Australia. This influenced an upward movement in gas prices. September’s contract increased by 1 euro and closed at 36.4 €/MWh. The October gas contract rose by nearly 3 euros, ending the week at 42.1 €/MWh. The CO2 price climbed by around 1.5 euros, with the December 2023 contract ultimately settling at 88 €/EUA. Coal prices remained stable, resulting in a narrowing gap in production costs between coal and gas power plants.
Despite the rise in gas prices, Dutch power contracts for the upcoming months showed limited movement. September became 50 cents cheaper, closing at 95.1 €/MWh. October only saw a 1 euro increase, reaching 107.6 €/MWh. Consequently, both months experienced a decrease in clean spark spreads. The September CSS dropped by 3 euros to -5.7 €/MWh, while October’s decreased by over 5 to -4.2 €/MWh.

For next year, gas prices also increased. TTF rose by 3.5 euros, closing at 55 €/MWh. CO2 became nearly 2 euros more expensive for 2024, ending at 92.4 €/EUA.
The Dutch power contract for 2024 went up by almost 4 euros and ultimately stood at 130.3 €/MWh. Overall, the spark spread for the next year decreased by around 3.5 to -7.8 €/MWh, while the dark spread improved by 1.5 and reached 6 €/MWh.

Weekly changes