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European Power Prices for Monday Rise to Record on Cold Snap

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(Bloomberg) — European daily power prices surged as a swing to colder-than-normal temperatures is set to boost demand on Monday, while France halts more nuclear reactors.

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A combination of colder weather, low wind and nuclear outages, combined with very expensive natural gas prices, saw daily power prices in Spain jump to a record while French equivalent rose to its highest level since a rare price peak in 2009. With benchmark natural gas prices seen seven times higher than at the start of the year due hampered supplies from Russia, traders are bracing for even higher prices in the coming coldest winter months.

“The weather scene in Europe has been dominated by a blocking high-pressure which could persist,” Marex said in emailed note on Friday. That high pressure system will bring cooler-than-normal temperatures while blocking out windy and wetter low pressure conditions. Temperatures in Paris was seen near freezing on Monday, but set to drop as low -3.8 Celsius (25F) later in the week, according to emailed report by Maxar.

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German wind output was seen below 5,000 megawatts for most of Monday, compared with a record of 47,130 megawatt set on Nov. 30, according to Bloomberg model. Low wind levels seen throughout most of Europe was set to increase dependence of expensive gas and coal.

Electricite de France SA halted its Chooz-1 reactor at noon on Sunday until Jan. 23, as a part of extended halts of four of France’s biggest reactors due to safety concerns that will hamper available capacity during the most critical months of the year. Extended halts of also Paluel-1 and Gravelines-4 units will leave the country without 14 of its 56 reactors on Monday.

French day-ahead power for Monday rose to 382.08 euros per megawatt-hour in Epex Spot auction held at noon on Sunday, while German equivalent rose to third highest level on record at 331.37 euros. Spanish day-ahead auction settled at a record of 339.84 euros per megawatt-hour on OMIE-exchange.

French power for January closed at 590 euros and contract for February at 648.13 euros, meaning traders are betting that daily prices will surge even higher during coming winter months.

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