Here is Rystad Energy’s weekly power market note from analyst Fabian Rønningen:
Europe
The market experienced some much-needed relief last week, as gas prices weakened and renewables output was strong, pushing power prices down, but the respite was short-lived.
The recent explosion and consequent outage at the Freeport LNG facility in Texas is having a direct impact on European power prices, as LNG flows will undoubtedly be impacted long-term.
The UK and Germany had the lowest prices last week, with average spot prices of €135 and €155, respectively.
Despite boasting the highest prices in the region, Italy experienced its lowest weekly average price since before the Ukraine invasion last week, averaging €206 for the week.
But, mirroring the continental trend, prices are significantly higher this week, at €239 for the first few days.
In the futures market, front-month contracts spiked on the higher gas prices, with the Germany July contract now trading at €216 per MWh, up from €181 per MWh at closing 8. June, a 19% increase.
French futures are even higher, with the front-month trading at €260 per MWh at the time of writing.
Front-years for the two largest European markets have eased slightly over the last week but are still at very high levels, with the French contract at €296 and German at €226.
Lower Russian flows and the Freeport LNG outage are pushing gas prices higher.
The spot contract is now trading at €97 per MWh and even higher for the front month, €100.
The front year also moved upwards, but less overall movement, and has been trading relatively stable in the range €75-85 for the last two months.
The European Parliament met last week to revise certain elements of the EU ETS, but any revision ultimately failed and was pushed out in time.
Carbon prices have been increasing over the last week, currently trading at €85 per tonne.
APAC
The energy market operator in Australia (AEMO) took a drastic step and suspended the electricity spot market in Eastern Australia on Wednesday, June 15, following a string of outages in the region's coal plants.
The move was intended to avoid blackouts in New South Wales and Queensland, and the market operator will set prices during the market suspension and pay operators to cover their costs.
The overall supply situation in the region is tight, and consumers are urged to save power so regular market operations can continue as soon as possible.
A combination of factors is causing the situation, including planned and unplanned outages, low solar and wind output, on top of a cold snap, and high fuel prices for coal and gas.
