Forward prices reach fresh highs with CO2 and fuel prices

PARIS: Year-ahead power prices hit fresh highs in Tuesday trading, tracking similar jumps in carbon permits and fuel prices.

Along the curve, German Cal '22 baseload was up 1.3% at 51.65 euros ($62.74) per megawatt hour (MWh) at 1111 GMT, having touched its highest level since September 2019 at 51.80 euros.

French 2022 supply reached a record high at 53.25 euros/MWh, up 1.6%.

December 2021 expiry European CO2 allowances jumped 1.5% to 35.05 euros a tonne after hitting a record high of 35.42 euros earlier in the trading session.

Hard coal for northern European delivery in 2022 remained untraded after closing at $71.75 a tonne on Monday.

Spot prices diverged on Tuesday on a forecast of higher German wind power supply on Wednesday and lower nuclear availability and wind power supply in France.

German baseload for Wednesday was down 1.1% at 46 euros/MWh while the equivalent French contract was up 1.9% at 69 euros.

"We expect a less volatile ride and higher power spot prices in 2021," Swiss utility Axpo said in a research note, adding that weather, global politics and a longer impact from the coronavirus could be destabilising influences.

German wind power is expected to rise by 4.6 gigawatts (GW) on Wednesday to 36.8 GW while French wind power is projected to drop by 3.8 GW to 5.3 GW.

French nuclear availability fell 1.4 percentage points to 85.7% of installed capacity as the Chinon 4 reactor went offline.

On the demand side, Germany is likely to register a day-on-day rise of 1.6 GW to 63.7 GW as the average temperature falls by 1.6 degrees Celsius to 1.5 degrees, the data showed.

French consumption is expected to decline by 3.3 GW to 72.5 GW, with the average temperature in the country forecast to rise by 1.7 degrees Celsius to 7.7 degrees.