2024-02-19 09:31:34
The average price of electricity per day in the wholesale electricity market (the so-called “pool”) in the first half of February was 54.48 euros per day. megawatt hour (MWh), 26.5% less than in January and 58.7% cheaper than a year ago, caused by the collapse of demand A, which has fallen to levels last seen 20 years ago, and the production costs of gas-fired combined cycle plants, which determine marginal prices in the daily market, especially at peak hours. In particular, electricity consumption has fallen by 7% compared to last year, 10.5% compared to five years ago and basically the same as 20 years ago for both citizen and business demand, the decrease in consumption was determined mainly by a mild winter, an increase in self-consumption and a change in consumption habits as a consequence of improvements in energy efficiency and rising prices analyst of the ASE Group.
Regarding industrial demand, the latest data for December showed that, despite the sharp drop in electricity prices, industrial demand fell by 11.4% year-on-year.
The consulting firm’s analysts highlighted that the lower weight of industry in the economygreater efficiency of processes, self-consumption and the relocation of certain intensive industry, in response to the high prices of the last two years, “have destroyed an important part of demand, which we still do not know if it will be recovered.”
Furthermore, they predicted that the current trend of decreasing demand and increasing renewable generation, especially photovoltaic, could “lead to a significant imbalance between demand and supply and lead to very low electricity prices, with important consequences for the the profitability of renewable assets.
Regarding gas consumption, it decreased by 18% so far in February, due to its lower consumption for electricity generation (-45.9%). Regarding the demand for industrial gas, it decreased by 8.3% year-on-year.
Fall in gas prices and co2 emissions
For its part, the decrease in gas prices and CO2 emissions have cut its costs by 50% since last October. Gas markets have accumulated a drop of more than 35% since October and CO2 emissions have stood at 56 euros per ton of CO2, their lowest value since mid-2021, thus impacting the reduction in the price of electricity.
This drop in the prices of the main commodities (gas, coal and CO2 emissions), together with the decrease in energy demand due to the mild climate and economic weakness in Europe, has translated into generalized falls in all electricity markets. Europeans.
Spain, a 21% lower price
Even so, Spain registers a price 21.2% lower than the group of large European economies, maintaining a strong discount premium.
In addition, Grupo ASE analysts highlighted that the mild winter that Europe is experiencing and the slowdown of its economy, together with the lower demand for gas for electricity generation, has generated “an important ‘cushion’ of gas storage inventory for end the winter, which has reduced the volatility of recent weeks”, with European reserves that are at 67%, which will make the effort to refill reserves during the spring and summer “be much less than that of years previous, despite the Russian supply cut.
Prices contained in 50-60 euros/mwh for all of February
All of this leads to predicting, according to the consultancy, that prices will remain contained until the end of the month, since wind generation forecasts indicate that it could reach 200 gigawatt hours (GWh) during the next week, exceeding the average for this time of year of 160 GWh.
Likewise, demand forecasts will continue to be clearly lower than average, so electricity prices should remain very contained, between 50-60 euros/MWh for next week, they estimated.
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