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E.ON sold ahead German nuclear power at above market prices

FRANKFURT (Reuters) - German utility E.ON EONGn.DE said on Tuesday it has sold forward 65% of its nuclear power generation in 2021 and 34% of its 2022 output at prices well above the current wholesale market, raising earnings prospects from that segment.

The company has to date also sold some 86% of output in the current year from reactors at its Preussen Elektra unit, it showed in presentation slides on reporting financial results for first quarter 2020.

Production in 2020 was sold at 46 euros ($49.72) per megawatt hour (MWh) after 2019’s locked in price had been 33 euros.

Hedge rates of forward production volumes are tracked by wholesale market traders and analysts to assess volumes tied up with counterparties and the value of future production.

As for achieved prices in the forward sales, both 2021 and 2022 were locked in at 46 euros, the slides showed.

Over-the-counter prices for German round-the-clock power from all conventional energy sources to be delivered in 2021 closed at 36.5 euros/MWh TRDEBYZ1 on Monday, Refinitiv Eikon data showed, while delivery for 2022 closed at 40.4 euros TRDEBYZ2.

Power curve prices slumped to two-year lows during lockdowns in March and April due to the coronavirus crisis which sapped demand, but have recovered some ground in May.[EL/DE]

While producers benefit from high forward rates, the profitability of utilities’ distribution units is being hit by lower volumes placed with consumers, leaving them stuck with unsold volume that they have to sell back into a weaker wholesale market.

E.ON retained its Brokdorf, Grohnde and Isar 2 reactors after an asset swap deal in which it transferred minority interests held by Preussen Elektra in the RWE-operated RWEG.DE Emsland and Gundremmingen C plants.[POWER/DE]

Rival Uniper UN01.DE last week also published some nuclear and hydropower hedging results as part of its earnings report.

Reporting by Vera Eckert; Editing by Michelle Martin

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