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Reviewing the German power market 2018-2020 using EQ data

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

EQ has recently made power and fuel contracts for all European markets available in their data section and will soon also make SRMC-calculations available for the same markets.

To begin with, the fuel chart with Month-Ahead contracts shows very clearly the development, and lately we the changes by March/April-20 due to the economy picking up after the Corona-driven downturn.

The gas curve has declined most significantly since the start of the Corona-crises, while the EUA market has strengthened the most lately.

If we look to the M+1 power and SRMC coal and gas curves, we see how the German power market (Base) during 2019 and start of 2020 mainly followed the SRMC coal despite stronger EUA-price and more profitable SRMC for gas.

Interesting movements occurred in the May-June-July contracts as the power market switched from coal to gas SRMC for May and June, while the July contract has so far been traded close to the SRMC for coal. There are, of course, also other factors to explain these movements in more detail, including the German power balance and surrounding markets.

We have in this blog focused on observed market movements, and in the following chart you can see how the June and July contracts have been traded during 2020 (weekly data), and compared to the SRMC:

We see how the power contracts followed the coal SRMC until start of March (Corona-crisis). Then the June contract came closer to the falling SRMC-gas, while the July contract more or less continued on the SRMC-coal curve.

In the first half of June the July contract has made an upward correction closer to the SRMC coal curve.                                                                    

Market expectations are reflected in the forward curve of power and fuels and EQ has prepared price data in formats that make data sourcing efficient for our customers. We plan to show you more about how to benefit from our approach in future blog posts.

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