Power Market Report

Spot Market & Control Reserve Market

Here you find our up-to-date power market report, an analysis of last week's prices on the German spot market and control reserve market. Every Wednesday directly from our Trading Floor.

Market Watch Germany - CW 41

As in the past weeks, week 41 was also significantly influenced by the wind production. Due to very low feed-in from wind turbines, the residual load reached 56 GW on Monday, the maximum of the previous week. Until Tuesday morning, however, wind power feed-in rose sharply and continued to increase steadily until the weekend. As a result, the residual load decreased daily and was reduced to around 10 GW in the early morning hours of Saturday. On the weekend, wind flattened out for the time being. Since solar production reached its weekly peak of just under 20 GW in the midday hours of the weekend, the residual load remained largely below 30 GW.

Spot Market

Short Term Prices

Last week, prices on the short-term markets followed the residual load’s pattern. The highest prices were reached on Monday (the Day-Ahead reached 62 EUR/MWh); as a result, the day ahead price fell day to day, and Saturday’s Hour 3 even turned negative at -4.91 EUR/MWh. The Intraday market followed the Day-Ahead very closely for most of the week. Only on Friday and Saturday, prices deviated (on Saturday, Intraday was negative for 7 hours, 6 hours of it in a row), which was muchdue to the fact that wind was above forecast.

Reserve Power

Average Reserve Power Energy Prices

The average energy prices for both SRL and MRL this week were consistently below 10,000 EUR/MWh. However, there were still individual bids that were well above the 10,000 EUR limit. This will to change in week 42: the German TSOs announced in the middle of last week, at the instruction of the Federal Network Agency, that they would reintroduce a technical price cap of € 9,999.99/MWh for the provision of SRL and MRL starting on the delivery date of 17 October 2019. Another headline was delivered by the FNA itself: The balancing energy market concept of the TSOs, which allows all pre-qualified suppliers to supply balancing energy irrespective of their participation in the balancing capacity market, was approved. The balancing energy market is to start by 01.06.2020 at the latest.

Reserve Power

Average Reserve Power Capacity Prices

The average capacity prices for balancing reserve in the past week were consistently within a moderate range. The relatively high electricity prices at the beginning of the week resulted in high opportunity costs for positive MRL, which is why these were at a maximum of 50 EUR/MW up to and including Wednesday. With electricity prices falling over the course of the week, average capacity prices for positive MRL also decreased. Capacity prices for positive SRL increased until Friday evening, then fell again during the weekend. The prices for negative control reserve rose daily during the last week and peaked on Sunday noon. With the exception of Sunday, the first two time slices were always the most highly priced.

Reserve Power

FCR Capacity Prices

Compared to the PRL capacity price of 424 EUR/MW on Monday of week 40, the prices in week 41 started at a relatively low level. In the second half of the week, however, prices went back up to the level of the previous week. The maximum PRL price of the week was reached on Saturday and stood at EUR 315.60 per MW.

Market Watch - Previous Reports

Market Watch Germany - CW 40

Last week began with the climax of Storm Mortimer in the early morning hours of Monday. Wind feed-in then remained at around 20 GW until Thursday evening, when the feed-in low of a good 3 GW was reached. Due to a nearly continuous cloud cover, the PV production remained negligible and below 15 GW at noon; Friday to Sunday not even 10 GW were reached. So despite the holiday on Thursday, the residual load remained practically always over 20 GW, except, of course, on early Monday.

Renewable Production and Residual Load, power market report

Spot Market

Short Term Prices

Accordingly, the prices - apart from Monday morning - remained very stable and did not collapse on Thursday, either, thanks to a rather constant residual load. On the holiday and bridge day, the intraday prices were significantly below spot levels. Furthermore, there were no special outliers and the weekend prices remained without any special events.

Short-term prices, power market report

Reserve Power

Average Reserve Power Energy Prices

With the exception of the public holiday, energy prices for reserve power remained moderate. The average energy prices in the chart are somewhat deceptive of the fact that the first approximately 500 MW in the merit order, which are executed most frequently, were often still in the double-digit range. Bids at the end of the merit order pull the average into a different order of magnitude. Only the holiday broke this week’s pattern, where above all the positive reserve power became very expensive. This, however, cannot really be justified, since the spot prices in the shoulder hours of Thursday were about 50 EUR and the day was not at all different from the other days. Thus, the explanation might better be sought in the strategic bidding behavior for the holiday mode rather than in fundamentals.

Average reserve power energy prices, power market report

Reserve Power

Average Reserve Power Capacity Prices

Capacity prices were only of significant value on Monday (when spot prices were in the negative range), then they flattened out – even on Thursday – and remained slightly above 0 EUR on average.

Average Reserve Power Capacity Prices, power market report

Reserve Power

FCR Capacity Prices

FCR achieved the highest prices for a long time on Monday. Here a connection to spot prices becomes apparent as the willingness of plant owners to run at all and thus be able to produce FCR suffered with negative prices. The rest of the week remained at a normal level; even the weekend saw no upward outliers as it happened in the past weeks.

FCR Capacity Prices, Reserve Power, power market report

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