Platts: December European Power Prices Volatile as Strong Winds Offset Early Month Highs

LONDON, Jan. 8, 2015 /PRNewswire/ -- Continental European day-ahead electricity prices were volatile in December with a 9% decline in Germany more than offsetting increases in France, according to data just released by Platts, a leading global energy, petrochemicals, metals and agriculture information provider.

The Platts Continental Power (CONTI) Index* slipped 0.23% in December to €38.69 per megawatt hour (/MWh) compared to November's €38.78/MWh. The Index was down 17.33% compared to December 2013's €46.80/MWh.

Platts' regional analysis of European power and gas markets in December showed the following:

• Germany: Day-ahead power prices averaged €33.40/MWh, down 9% from November and down 6% from December 2013. German wind output hit a new record December 12, peaking just below 30 gigawatts (GW) during the afternoon. Relatively mild, windy conditions ensured low prices through much of the month.
• France: Day-ahead power prices averaged €40.94/MWh, up 6% from November and down 17% from this time a year ago. Electricite de France (EDF)'s December nuclear output rose 2.3% year-over-year to 41.2 terawatt hours (TWh), limiting early December price rises due to a cold spell.
• U.K.: Day-ahead power prices fell 7% from November to £43.55/MWh and were down 15% on December 2013 levels. Natural gas prices fell 2% from November and were down 23% year-over-year. Strong wind power output reduced the need for gas-fired power generation.
• Netherlands: On the Dutch TTF, continental Europe's most liquid natural gas hub, day-ahead gas prices also were down 2% month-over-month, and 19% below December 2013 levels.

"German and French day-ahead power prices hit year highs in early December as low wind and solar power reduced supply in Germany, while colder weather boosted demand in France above 80 GW," said Andreas Franke, Platts managing editor of European power.

"Prices then plunged mid-December as record wind power production boosted supply," he added. "German day-ahead baseload power, which reached €56/MWh December 3, settled below €30/MWh as wind output peaked at just below 30 GW December 12."

German wind production of 8.9 TWh in December was almost double November's output and up 20% from December 2013, according to data from Platts PowerVision.

"That amount is equal to the monthly output from Germany's entire fleet of nine nuclear reactors," Franke said.

Commenting on the gas market, meanwhile, Platts energy analyst Alex Froley said: "December's gas prices were around 20% lower than last year, and gas has continued to fall in early January, with the U.K. dropping below 50 pence per therm (p/th)."

"There haven't been any major supply problems or severe cold snaps so far this winter, leaving storage stocks high, while falls in Asian spot gas prices have helped Europe attract an upturn in LNG deliveries from Atlantic producers such as Trinidad & Tobago and Nigeria," Froley said.

The average U.K. day-ahead gas price in 2014 was 50.01 p/th, down 26% from 67.99 p/th the year before.

"The latest forward curve prices value 2015 gas lower again, at around 46.45 p/th, with the market reacting to the weak prompt and the downturn in crude oil," Froley said.

NOTE: All figures are monthly averages of daily day-ahead contract prices as assessed by Platts.

For more information on electric power or the methodology used by Platts in its power assessments, visit the Platts website www.platts.com.

*The Platts CONTI is a demand-weighted baseload average of day-ahead contracts assessed in Germany, Switzerland, France, Belgium and the Netherlands. The Platts U.K. assessments reflect day-ahead contracts assessed for firm delivery of power on the high voltage network of England, Wales and Scotland, and at the National Balancing Point (NBP) for gas. The Platts assessments reflect prices as determined between buyer and seller in the open physical markets.

About Platts: Founded in 1909, Platts 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. Platts' news, pricing, analytics, commentary and conferences help customers make better-informed trading and business decisions and help the markets operate with greater transparency and efficiency. Customers in more than 150 countries benefit from Platts' coverage of the biofuels, carbon emissions, coal, electricity, oil, natural gas, metals, nuclear power, petrochemical, shipping and sugar markets. A division of McGraw Hill Financial (NYSE: MHFI), Platts is based in London with more than 1,000 employees in more than 15 offices worldwide. Additional information is available at www.platts.com.

About McGraw Hill Financial: McGraw Hill Financial  (NYSE: MHFI) is a leading financial intelligence company providing the global capital and commodity markets with independent benchmarks, credit ratings, portfolio and enterprise risk solutions, and analytics. The Company's iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL and J.D. Power. The Company has approximately 17,000 employees in 30 countries. Additional information is available at www.mhfi.com.

SOURCE Platts

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