Electricity: Ukraine and Europe 20 – 24 May, 2024
Ukrainian Energy Exchange: bilateral contracts market
Last week, UEEX held 14 auctions for the purchase/sale of electricity in the unilateral auction mode, including 1 in the commercial section and 13 in the specialized section. The initiators included: Guaranteed Buyer, Euro-Reconstruction, Cherkasy Chemicals, DTEK Dniproenergo, DTEK Zakhidenergo, etc.
Euro-reconstruction initiated the auction, where it offered the base load. As a result of the auction, the company sold 50160 MWh of baseload at a weighted average price of 4000 UAH/MWh with delivery from May 24 to June 30.
Last week, Cherkasy Chemical Fiber sold 45600 MWh of baseload in specialized sections at a weighted average price of 4000 UAH/MWh with delivery from May 24 to June 30.
In addition, in the specialized section last week, DTEK Group companies initiated auctions in accordance with Article 66 of the Law of Ukraine "On the Electricity Market", where they offered block positions. As a result, the companies sold 3600 MWh of the block position (1-24) at a weighted average price of 4600 UAH/MWh and 210 MWh of the block position (18-24) at a weighted average price of 7467 UAH/MWh with delivery in June.
Last week, the Guaranteed Buyer initiated the auction in the specialized sections, offering block positions for daytime hours with delivery in June. As a result of the auction, the company sold 435800 MWh of block positions at prices in the range of 1100 - 3833,72 UAH/MWh.
In the commercial sections, the companies bought/sold electricity to loads with individual profiles.
| Trades type | Sales volume, MWh |
|---|---|
| Auctions pursuant to Article 66 of the Law of Ukraine On Electricity Market | 99 570 |
| Commercial section | 1 010 |
| Special sessions for the sale of electricity generated from alternative energy sources | 435 800 |
| Totaly | 536 380 |
As of May 24, prices for the most commonly used types of sales schedules were formed, as shown in the chart below.
Market operator: day-ahead and intraday markets
During the reporting period, the day-ahead market prices were stable, ranging from 4002,91 to 4450,75 UAH/MWh. Overall, the average weighted price for the last week decreased by 6% compared to the same indicator of the previous week and amounted to 4207,65 UAH/MWh. The highest daily price was 4450,75 UAH/MWh on May 24, and the lowest was 4002,91 UAH/MWh on May 18. The volume of sales for the reporting period of May 18-24 amounted to 450,48 thousand MWh, (+3,8%).
During the reporting period, prices on the DAM were volatile. The weighted average prices varied in the range of 4402.19 - 5819.65 MWh, and the average value of the weighted average prices for the reporting period decreased by 6% compared to the same period last year and amounted to 5161,83 UAH/MWh. The total volume of purchases and sales for the reporting period amounted to 64 thousand MWh.
European market
Last week, wind power generation decreased, which contributed to higher prices in most major European electricity markets compared to the previous week. Also, the increase in the average price of gas and CO2 emission quotas had a negative impact on the prices of the European electricity market. Spot prices averaged EUR 78,57/MWh, according to EEX.
Electricity generation from wind turbines in Europe in the first four days of last week provided 13.1% of the region’s needs, according to the WindEurope Association. The leading countries were Spain, Germany and Sweden.
Solar power generation continued to grow in Spain. In Germany, solar power generation last week averaged about 12,7 GW, which is 0,3 GW below the norm.
Demand last week fell in the markets of Portugal, the Netherlands, France, Belgium, Spain and the UK. On average, electricity demand in the largest industrial market, Germany, amounted to 47,7 GW, which is 2,2 GW below normal.
European temperatures are expected to be above average over the next two weeks, leading to increased demand in Europe.
As for hourly prices, most of the analyzed European markets recorded negative prices on May 19. The Dutch market again recorded the lowest hourly price of 80,00 EUR/MWh on Sunday, May 19, from 13:00 to 14:00.
As of May 24, the price of basic electricity in France amounted to 71,41 EUR/MWh; in Hungary: 99,97 EUR/MWh; in Poland: 106,67 EUR/MWh.
As of June 2024, electricity was traded in the range of 39 - 81 EUR/MWh in the analyzed countries.
Monthly electricity futures for July 2024 increased by an average of 15,5% in the analyzed countries. As of August 2024, prices increased by an average of 4,4 in Hungary and France.
Last week, Germany’s benchmark energy contract Cal ’25 almost reached a six-month high on Wednesday, the highest level since December 1, 2023, when the price exceeded 100 EUR/MWh. On May 23, the price was set at 100,84 EUR/MWh. This increase is mainly due to higher CO2 emission prices. The price of French electricity Cal’25 amounted to 88,47 EUR/MWh, an increase of 3%.
Futures contract prices, EUR/MWh, May 23, 2024
| Type | Contract | Date | France | Hungary | Poland |
|---|---|---|---|---|---|
| Base | Моnth | Jun/24 | 43,79 | 81,36 | 97,08 |
| Jul/24 | 60,62 | 87,58 | 98,21 | ||
| Aug/24 | 63,69 | 90,93 | 90,74 |
EU carbon emissions allowance prices rose on Thursday, May 23, setting another 4-month high as natural gas markets continued their recent rise and exceeded a key technical level. The EUA’24 settlement price amounted to EUR 75,81/ton amid weak auction results, which is 8% higher than the price of the day before last Thursday. On May 24, in the afternoon, the EUA’24 price was trading at EUR 74,61 per ton. Despite the increase in net short positions of market players, the fall in wind generation in Germany and Central Europe supported prices as fossil fuel power generation was brought on line to meet consumption.
On May 23, the spot price of thermal coal in Europe (according to API-2) amounted to 97,20 EUR/ton.
Last week, Russia’s shelling of Ukraine’s energy sector continued. There was a deficit in the power system last week, so electricity consumption restrictions were in place in all regions of Ukraine for industrial and residential consumers. Imports came from 5 countries: Slovakia, Romania, Moldova, Hungary, and Poland. Emergency assistance was also provided from three European countries: Romania, Poland, and Slovakia. Exports have not been carried out for a long time.
Public procurement
Over the past week, more than 30 electricity procurement tenders were held by customers. Sold volume of the 10 largest contracts amounted to 45,95 million kWh for a total value of UAH 178,47 million excluding VAT. The average price amounted to UAH 4,41 per kWh, excluding VAT. The largest contract was awarded to Energy Company of Ukraine JSC, which will supply 39,14 million kWh of electricity to Ukrvodservice at a starting price of UAH 3,82 per kWh, excluding VAT. Other tenders are shown in the graph below. Prices ranged from UAH 3,61 to 5,63 per kWh.
News from the wholesale electricity market
New price caps will be in effect on the electricity market from June. The regulator has set new price caps on the day-ahead market, intraday market and balancing market starting from June 2024. The relevant decision was made at the NEURC meeting on May 20. The Resolution will come into force on May 31, 2024.
The following price caps were approved:
1) on the day-ahead market and the intraday market: maximum price caps from 00:00 to 07:00, from 11:00 to 17:00 - UAH 5 600,00/MWh; from 07:00 to 11:00 and from 23:00 to 24:00 - UAH 6 900,00/MWh; from 17:00 to 23:00 - UAH 9 000,00/MWh; minimum price cap - UAH 10,00/MWh;
2) on the balancing market: maximum price caps from 00:00 to 07:00 - 6 600,00 UAH/MWh; from 07:00 to 17:00 and from 23:00 to 24:00 - 8 250.00 UAH/MWh; from 17:00 to 23:00 - 10 000,00 UAH/MWh; minimum price cap - 0,01 UAH/MWh.
In fact, the marginal prices for DAM and IDM for the hours of minimum load increased by 86%, and for the hours of "evening peak" - by 20%.
The Ministry of Energy is preparing a decision on a "reasonable tariff" for electricity for households. The Ministry of Energy is now continuing to calculate electricity tariffs for the population, and there is no final decision yet. This was stated by Deputy Energy Minister Mykola Kolisnyk on the air of the telethon "United News", Ukrinform reports. "Calculations are being made regarding the terms of special obligations at different prices. But they are based primarily on the fact that these should be affordable tariffs for the population," Kolisnyk said. He noted that a slight increase in electricity tariffs for households last year allowed the power industry to restore 3 GW of power plant capacity. "There is no final decision on a specific price," the deputy minister clarified. According to him, the ministry is also actively working to attract funding from international partners to carry out repairs at the generation facilities. As reported, the Cabinet of Ministers has extended the current electricity tariff for households until May 31.
