March 14, 2019 / 7:19 AM / 5 months ago

RWE hedges power prices up to 2021, CO2 costs into the mid-2020s

ESSEN, March 14 (Reuters) - German utility RWE, one of Europe’s biggest power generators, has sold much of its power output over the next few years at prices below current wholesale market levels, it said on Thursday.

* The company also covered much of its carbon emissions rights requirements through accompanying financial hedges to protect itself against generation margin risks.

* Wholesale traders and analysts use hedge rates to track earnings, to assess future volumes tied up with counterparties, and the value of forward production.

* Some 90 percent of German nuclear and brown coal production for 2019 and 2020 was sold at 29 euros ($33) per megawatt hour (MWh) and 31 euros per MWh respectively, RWE said on release of full year 2018 earnings.

* Some 80 percent of 2021 delivery was sold at 37 euros.

* RWE’s average hedged power price for 2018-20 is equal to an average hedged CO2 price of 5 euros a tonne and 2021 to a carbon price of 7 euros, it said.

* The company said its CO2 position was financially hedged until the mid-2020s.

* Eikon Refinitiv German baseload power delivery for 2020 closed at 46.6 euros/MWh in the European wholesale market on Wednesday , 2021 at 44.4 euros, 2022 at 45.3 euros and 2023 at 47.0 euros.

* Prices are holding up well after sustained rallies on firm fuel and carbon prices in 2018.

* Carbon emissions for December 2019 expiry closed last at 22.28 euros/tonne.

* RWE had sold its 2018 power ahead at 28 euros/MWh.

* Sector peers Uniper and E.ON gave details of hydroelectric and nuclear generation hedging at earnings on Tuesday and Wednesday respectively. ($1 = 0.8836 euros) (Reporting by Vera Eckert, Editing by Mark Potter)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below