Wind capacity sends spot tumbling

PRAGUE: An expected surge in wind generation drove Czech spot power prices lower on Thursday, offsetting increased air conditioning demand due to warmer weather, traders said.

Electricity for Friday delivery fell 3.30 euros to 49 euros ($70.82) per megawatt hour in the over-the-counter market, in line with neighbouring Germany. Day-ahead cleared Czech market operator OTE's daily auction price was down 8 percent to 49.73 euros.

Thomson Reuters Point Carbon data showed wind capacity in Germany, which supplies most of the region's renewable power, was expected to soar to around 8,000 MWh from just more than 1,000 MWh.

"Liquidity is thin on the short curve, there isn't much room to trade," one trader said. "Cal is down with everything."

Power for next week jumped 4 percent to 51.25 euros as warmer weather was forecast, and the front month gained about 1 percent to 53.50 euros. Cal '12 base load was down almost 1 percent to 54.85 euros in late afternoon trade on the Prague-based Power Exchange Central Europe.

Around the region, the benchmark German Cal '12 contract was down 28 cents to 56.95 euros in late afternoon trading on Germany's EEX.

Day-ahead on Hungary's HUPX exchange fell to 50.12 euros from 52.87 euros. This was below the 52 euro level where the spot contract traded in the over-the-counter market.

On Poland's POLPX exchange spot prices dropped to 191.93 zlotys ($67.16) from 196.87 zlotys on lower export capacity and significantly higher imports from Sweden, traders said. Imports from Sweden planned for Friday jumped to 7,131 megawatt hours from 1,236 megawatt hours planned for Thursday.

Only one unit will be switched off for weekend maintenance a 220 megawatt unit at EDF's Rybnik power plant, data from the grid operator showed on Thursday.

"There were fewer exports than yesterday and the day before, and imports from Sweden reappeared, all leading to a drop on the spot market," a trader said.

Brent crude fell below $109 a barrel after reaching a two-week high the previous day as worries about euro zone debt problems, weak US jobs data and a slower global growth outlook weighed on prices.

EUAs for December delivery, the bellwether carbon contract, were down nearly 4 percent to 12.33 euros a tonne at 1313 GMT.

Copyright Reuters, 2011