ELECTRICITY

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SPAIN – Spot power to see EUR 10 weekly surge on lower wind

(Montel) Spanish spot power prices on Monday looked set to rise more than EUR 10 this week amid forecasts for lower wind output.

Baseload power for Monday settled at EUR 45.85/MWh, while the weekly contract closed on Friday at EUR 51.25/MWh on the EEX. This compares with last week’s average of EUR 48.32/MWh.

Volue and Montel’s Energy Quantified (EQ) expected day-ahead prices this week to average EUR 58.90/MWh and EUR 57.94/MWh, respectively.

Prices could rise above EUR 60/MWh, said Milton Ceron, an analyst at Montel analysis firm EnAppSys, pointing to an expected decline in wind generation.

The week could average “just over EUR 50/MWh” amid lower wind output, said a Spanish trader.

Wind generation should fall this week to around 7.4-8.6 GW/day, down from last week’s average of 11 GW/day, according to EQ, Volue and TSO Red Electrica.

Meanwhile, power demand should inch up by around 0.3-0.7 GW to average 27.2-27.6 GW/day this week, with temperatures expected to rise by almost 2C to average more than 12C, according to the forecasters.

Front month rebounds
Further out on the power curve, the front-month contract was last seen up EUR 1.60 to EUR 41.20/MWh on the EEX. On Friday, it dropped to EUR 39.30/MWh, its lowest level since early March 2021.

The front-month lows were in line with expectations that renewable production would continue to sink power prices in Spain, after wind and solar plants added 6.5 GW of capacity last year, Ceron said.

“Periods of zero prices will be more spread throughout the week, rather than concentrated on weekends as they were last year. These episodes, while brief, could become more frequent,” he added.

However, March prices could rise further as weather forecasts pointed to a rainy end of February, although not as wet as previously expected, the trader said.

Green curtailments looked poised to be one of the main drivers for power prices in Spain this year, industry experts told Montel in December.