Back to Blog

Fuels lifted French and German July prices

Eylert Ellefsen
Archived blog post. This blog post has been transferred from our previous blogging platform. Links and images may not work as intended.

European spot prices turned out significantly higher in June than what the market expected by end of May. In this blog post, we’re reviewing the main reasons, focusing on France and Germany.

  • Weekly spot prices rose from about 20 €/MWh to about 30 €/MWh during June:            
Spot Base weekly CWE (DE+FR) Apr-Jun (EUR/MWh)
  • The average spot-prices for June were delivered about 5.0 €/MWh higher than last traded for Germany and France:

These price increases were partially caused by a moderately bullish fundamental situation, but more so from rising fuels/SRMC costs. Take notice that by end of May the weather outlooks and available production capacity for the first part of June were already priced into the traded June contract.

Main fundamentals CWE Weekly (MW) since April

The chart above shows that German wind power production turned out lower than normal in June, while French nuclear production fell gradually over the month. We also saw high temperatures during week 26, which contributed to a moderately bullish fundamental situation.

Fuels: July contracts

Fuel prices rose significantly during June (ref above chart). Furthermore, due to issues with Russian coal supplies, falling French nuclear availability and rising EUA prices (+24%), the July contract rose about 25% during June. Gas prices, on the other hand, moved less:


This meant that the SRMC for coal and gasrose by 20%-25%, or at an average of about 5 €/MWh. This difference of about 5€/MWh is quite close to the increased June spot compared to the last traded M+1price on 29 May.

We conclude that the increase in fuel pricesled to an 5 €/MWh increased spot-prices as an average for June.                                                                                                                                                                                                                                                                                              

In the following chart, we show the traded July contracts and calculated SRMC's for France and Germany since the start of May:

FUT + SRMC- Germany/France July (€/MWh), Base 40D history

Traded prices are quite close to the coal SRMC as the gas-fired capacity can not cover all the demand for conventional thermal power.                                                                                                                                                                            

Slightly higher French prices at the end of June indicate a fear of a heatwave and low nuclear capacity.                                                                                                

Despite these and other interesting fundamental factors for July, we believe that the direction of fuels and CO2 prices will be the key factors to watch in July.

Edited by: Morten Munkejord

More from the Blog

Austrian hydropower: Extreme precipitation and flooding in week 32

Eylert Ellefsen

The hydropower situation in Austria is now at a nearly maximum resource level. Production from the reservoirs has to be increased in the coming weeks to avoid further flooding and uncontrolled production levels. So far, we haven't seen any effect on the spot market as the German renewables are the main price drivers. However, the strong Austrian hydropower will contribute to slightly lower domestic spot prices.

Read Story

Yr-2021 power contracts: Massive market movements, uncertainty and COVID-19 recovery

Eylert Ellefsen

The market outlooks for 2021 are very exciting with uncertainty about French nuclear capacity, effects of German coal-fired and nuclear phase-outs, and consumption and financial recovery from COVID-19. In addition, there is an upward potential for both CO2 and gas prices.

Read Story

Romanian hydropower situation back to normal?

Eylert Ellefsen

The hydropower situation in Romania and most of Southeastern Europe improved in July after a wet June. Price differences between Austra (CWE region) and Hungary/Romania (SEE region) are significantly reduced from the start of Q2. Outlooks for August indicate that the price difference most likely will come out lower than 7 €/MWh which has been traded in the end of July.

Read Story

Ready to try Energy Quantified?

No payment or credit card required.
Would you rather like a personal demo? Book one here with Hugo