In the last week of January, average prices in European electricity markets showed a notable decrease compared to the previous week. This decline is mainly attributed to a drop in demand and an increase in solar photovoltaic and wind energy production. Despite the overall downward trend, prices experienced an increase throughout the week, culminating in higher figures over the weekend. This increase was largely due to the rise in gas and CO2 prices, which reached levels not seen since late 2023.
Solar photovoltaic production, on the other hand, increased significantly in the main European markets, with a 105% increase in Portugal standing out as the market with the highest growth. Spain also experienced a prominent growth of 65%. Both Iberian markets achieved their highest production ever for the month of January, reaching 17 GWh in Portugal and 119 GWh in Spain. Additionally, France recorded a historic photovoltaic production of 62 GWh on February 2nd.
In the field of wind production, an increase was also observed in most European markets. Italy reported a 37% increase, while Portugal and France reached historic records in wind production during the week. However, a decrease in wind production is forecasted for the first week of February, according to AleaSoft Energy Forecasting forecasts.
Regarding electricity demand, a general decline was recorded in all markets, with the Netherlands showing the largest decrease at 11%. In contrast, Spain reported the smallest reduction, at only 0.7%. This behavior in demand was influenced by less cold average temperatures in most markets.
As for electricity prices, the Spanish and Portuguese MIBEL market experienced the greatest percentage drop, at 38%, while the Italian IPEX market showed the smallest decrease, at 7.8%. Most European electricity markets, including the Iberian peninsula, benefited from this drop in prices during the week, although a gradual increase was observed towards the end of the week.
In the context of fuels, Brent crude oil futures prices fluctuated, reaching a peak of $77.49/bbl on January 28th. TTF gas futures prices increased on January 31st, closing at 53.24 €/MWh, the highest since mid-October 2023. Additionally, CO2 emission permit prices showed an upward trend, reaching 83.93 €/t by the end of the month.
For the first week of February, forecasts point to an increase in electricity prices, influenced by the rise in demand and the decrease in wind production. Markets will be attentive to developments in fuel prices and weather conditions that may affect energy production.
Source: MiMub in Spanish
