Iberian spot power eases as feeble winds recover

MADRID Tue Aug 30, 2011 2:04pm BST

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MADRID (Reuters) - Iberian wholesale prompt power prices retreated from 31-month highs for the second straight day on Tuesday due to forecasts becalmed wind parks would boost production of cheaper power.

After a daily auction matching bids for and offers of power for the coming 24 hours, the Omel spot exchange fixed the "pool" price at 55.63 euros per megawatt-hour, falling from 57.91 euros previously.

National grid operator REE meanwhile estimated that wind power in Spain -- which accounts for 85 percent of the Iberian Electricity Market (Mibel) -- would surge to as much as 4,843 megawatts later in the day from 1,739 MW at midday.

Omel set a pool price on Sunday for the day ahead at 58.29 euros/MWh, its highest level since January 16, 2009, when it reached 58.62 euros.

Along the curve, the benchmark calendar-year 2012 contract was unchanged at 54.00 euros/MWh on Omip, the Mibel's Portuguese-based futures exchange.

Supporting prices were seasonally low output of hydropower and demand for power to drive air conditioners in the summer heat.

Official data released on Tuesday showed that water reserves for hydropower fell last week, but were still comfortably above average.

Spain's eight power stations were all running as normal and generating 7,170 MW between them, or 19.1 percent of domestic demand, according to data from REE and the CSN nuclear watchdog.

Wind, hydro and nuclear power weigh on the pool price because producers can sell it at a discount to electricity generated by burning mostly imported gas and coal.

(Reporting by Martin Roberts)