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EUROPE POWER-Spot slides on increased renewables output
October 4, 2016 / 12:01 PM / a year ago

EUROPE POWER-Spot slides on increased renewables output

* German wind and solar seen high on Wednesday

* Spot slides despite firm demand

* Forward curve off previous highs as oil eases

PARIS, Oct 4 (Reuters) - European spot electricity for day-ahead delivery fell on Tuesday, weighed by strong wind and solar power availability in Germany and an expected rise in French nuclear output, while the year-ahead price pulled back from previous highs as oil fell.

German wind power supply for Wednesday is expected to fall slightly by 640 megawatts (MW) day-on-day, but will remain high at over 12.6 gigawatts (GW), while solar production will increase by 1.5 GW to 4.6 GW, Thomson Reuters data showed.

“The increase in renewables output will push additional capacity from Germany to France,” a trader said.

Germany is seen as a net power exporter of over 600 MW on Wednesday.

In France, where nuclear power accounts for about 75 percent of electricity needs, available nuclear capacity will rise by about 1.2 GW.

The German baseload power price for Wednesday delivery was unchanged at 30.95 euros ($34.57) /MWh by 1100 GMT having opened slightly lower at 30.75 euros. The French contract tumbled 4.75 euros or 10.86 percent to 39 euros /MWh.

Along the forward power curve, prices rose marginally on Tuesday but were off recent highs as oil fell.

Oil prices eased on news that Iran and Libya have continued to increase production, overshadowing an OPEC agreement struck last week to freeze output levels in a bid to stem a two-year price rout.

The German benchmark Cal‘17 year-ahead baseload contract was up 1 cent or 0.34 percent to 29.9 euros a megawatt hour (MWh) compared with Monday’s close, having opened at 30.20 euros/MWh.

The less liquid equivalent French contract also gained 1 cent or 0.26 percent to 39.25 euros compared with Monday’s close, after opening at 39.55 euros.

Carbon prices, which utilities take into consideration in the cost of power generation were also down. Front-year EU carbon allowances fell over 2 percent to 5.20 euros a tonne.

Coal, which accounts for more than 40 percent of German power generation, rose 2.29 percent to $64.85.

Physical thermal coal prices hit their highest level since the start of 2014 on Tuesday after tougher Chinese transport rules raised freight costs, adding to the earlier impact of Chinese caps on mining.

In eastern Europe, the Czech year-ahead 2017 contract rose 0.17 percent to 30.35 euros/MWh. The spot price for Wednesday fell 13.5 euros or 30.34 percent to 31 euros/MWh.

The day-ahead price retreated after soaring the previous day following reports that repairs and upgrades at the Czech 800-megawatt Chvaletice lignite plant faced delays that will keep the facility offline until the end of October.

$1 = 0.8952 euros Reporting by Bate Felix, editing by David Evans

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