German elections push up power prices on the continent

Posted on 25 September 2013 by Tom Grimwood

Continental power prices saw gains and coal and carbon prices became firmer last week ahead of the German elections according to ELN’s latest market report with npower.

Power prices rises are set to continue this week following Angela Merkel’s “historic” return to power, as traders bet on “clearer policy across the EU, especially on the back loading of carbon permits” said Sammy Blay, npower’s Client Portfolio Manager.

Prompt and near term gas contracts in the UK “shed value for most of last week” in response to mild weather predictions for Britain and the return of Norwegian fields to service after maintenance.

It was a different story with prompt power prices as unplanned nuclear outages took 1.6GW of capacity offline forcing heavier reliance on more expensive gas generation.

Across the curve, direction was dictated by weakness in the oil and gas market as supply risks faded in the Middle East and Libyan oil output began to pick back up following a collapse in production.

Looking ahead Sammy Blay said: “Some nuclear plants are due to return back online by the end of the month, so that should ease the pressure on prompt power market. However wind forecasts are not particularly inspiring so we don’t expect any significant change to the dynamics of the power market.”

Thawing relations between the US and Iran will continue to push oil prices down. However, improving signs of economic health in China and the Eurozone along with continued expansionary policy in the US should mean any losses are short lived.

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Article source: http://www.energylivenews.com/2013/09/25/german-elections-push-up-power-prices-on-the-continent/