Electricity: Ukraine and Europe October 14 – 18, 2024
Ukrainian Energy Exchange: bilateral contracts market
During last week 14 auctions for the purchase and sale of electricity in unilateral auction mode were held at UEEX, of which 7 in commercial sections and 7 in specialized. Among initiators were: Ukrhydroenergo, Centrenergo, Starokonstantinovtsukor, USP and DSO, etc.
Ukrhydroenergo initiated auctions proposing base load with different supply periods for October. As of the auction result Company sold 6888 MWh of base load with weighted average price UAH 5021,95 per MWh with delivery period October 17-23, 2184 MWh of base load with weighted average price UAH 5099,77 per MWh with delivery period October 19-25, as well as 11284 MWh with weighted average price UAH 5036,06 per MWh with delivery period October 23-31.
During the reporting period, Centrenergo initiated auctions in accordance with Article 66 of the Law of Ukraine On the Electricity Market, where it offered base load with a delivery period of the third decade of October. According to the results of the auctions, the company was unable to sell the volume offered.
In addition, in the specialized section last week, Starokonstantinovtsukor initiated an auction in accordance with Article 66 of the Law of Ukraine “On the Electricity Market”, where it offered base load with delivery in the third decade of October. As a result, the company sold 289 MWh of baseload at a weighted average price of 4700 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 | 20 645 |
| Commercial section | 97 584,372 |
| Totaly | 118 229,372 |
As of October 18, prices for the most commonly used types of sales schedules were formed, as shown in the chart.
Market operator: day-ahead and intraday markets
During the reporting period, the day-ahead market prices were volatile, ranging from 3908,61 to 6847,69 UAH/MWh. Overall, the average weighted average price over the last week increased by 11,7% compared to the same indicator last week and amounted to 5633,59 UAH/MWh. The highest daily price was 6847,69 UAH/MWh on October 12, and the lowest - 3908,61 UAH/MWh on October 13. The volume of sales for the reporting period of October 12-18 amounted to 518,45 thousand MWh (+12,6%).
Prices on the IDM were also volatile during the reporting period. The weighted average prices varied in the range of 4215,99 - 7143,92 UAH/MWh, and the average value of the weighted average prices for the reporting period increased by 30,3% compared to the same period last year and amounted to 5721,94 UAH/MWh. The total volume of purchases and sales for the reporting period amounted to 40,25 thousand MWh.
European market
At the beginning of last week, prices on electricity markets were rising due to lower temperatures, but since the middle of the week, the growth of wind power production in most of the analyzed markets, which reduces the demand for gas for electricity, has led to a decrease in electricity prices. In addition, the price of CO2 emission allowances has been declining over the past week. This also contributed to lower electricity prices.
European spot electricity prices rose on Thursday, driven by a decline in renewable generation. The German DA price soared by 43%, closing at 102,27 EUR/MWh, while the French day-ahead price jumped by 13%, settling at 67,38 EUR/MWh.
Electricity generation from wind turbines in Europe during the first four days of last week averaged 18.8% of the region’s needs, according to the WindEurope Association. At the same time, the largest volumes were generated on different days by the following countries: Germany, France, Spain, and Sweden.
Solar energy generation in Europe in the first four days of last week increased slightly compared to the same period of the previous week and totaled about 2006 GWh. The average capacity of solar energy generation in Europe in October decreased to 21,16 GW.
Demand for electricity increased in most major European electricity markets compared to the previous week. Demand grew in the Polish, German, Spanish, and Belgian markets, while it declined in the Portuguese and French markets. For the first four days of last week, the average European demand was at 310,1 GW.
On Sunday, October 13, the German, Belgian, British, French and Dutch markets recorded negative hourly prices. The German market registered the lowest hourly price: -15,69/MWh, on Sunday, from 14:00 to 15:00. The next day, on October 14, from 19:00 to 20:00, the French and British markets recorded the highest hourly prices since the beginning of December 2023: EUR 161,89/MWh and pound 199,98/MWh, respectively.
As of October 18, the price of basic electricity in France amounted to EUR 67,38/MWh, in Hungary 81,88 EUR/MWh; in Poland: 94,40 EUR/MWh.
As of November 2024, prices were traded in the range of 78-103 EUR/MWh in the above countries.
Monthly electricity futures for December 2024 increased by 3,6% in France and decreased by 2,6% in Poland and 0,9% in Hungary; for January 2025, they increased by an average of 11,3% in the analyzed countries.
The benchmark German energy contract Cal’25 increased by 0,3% to 86,79 EUR/MWh, while the French contract Cal’25 remained stable at 73.20 euros/MWh as the market remained relatively calm. French TSO RTE reported last week that the availability of EDF’s nuclear fleet this winter will be “very significant”, as it was last winter, allowing it to export electricity to neighboring countries in the event of a sharp cold snap.
Futures contract prices, EUR/MWh, 17.10.2024
| Type | Contract | Date | France | Hungary | Poland |
|---|---|---|---|---|---|
| Base | Моnth | Nov/24 | 77,89 | 102,50 | 99,59 |
| Dec/24 | 80,67 | 101,60 | 96,98 | ||
| Jan/25 | 95,7 | 112,85 | 100,97 |
European carbon prices have been falling, following the TTF market as demand for gas and electricity declines due to rising temperatures. EUAs, which expire in December 2024, settled at EUR 62,98 per ton last Thursday. The price of carbon emission permits in the EU was trading at EUR 62,42 per ton on October 18. Relatively mild weather forecasts for Europe and low demand put additional downward pressure.
Market analysts at the Carbon Forward Expo London 2024 said that there is a real possibility that the EU industry will not recover from the current production downturn for a long time, which could be a serious drag on European carbon prices over the next decade.
On October 17, the spot price of thermal coal in Europe (API-2) amounted to EUR 107,84 per ton, which is 1,13% lower than the week before last. End users note an oversupply of primary coal available from traders and potentially greater interest in resale from Europe.
Last week, Ukraine received imports from Hungary, Slovakia, Romania, Poland, and Moldova. Exports were to Poland, Hungary, Slovakia, Romania, and Moldova.
Public procurements
Over the past week, more than 20 electricity procurement tenders were held by customers. Sold volume of the 10 largest contracts amounted to 8,42 million kWh for a total value of UAH 196,08 million excluding VAT. The average price amounted to UAH 6,04 per kWh, excluding VAT. The largest contract was awarded to Energy Company of Ukraine JSC, which will supply 5,74 million kWh of electricity to the State Specialized Economic Enterprise “Forests of Ukraine” at an initial price of UAH 7.81 per kWh, excluding VAT. Other tenders are shown in the graph below. Prices ranged from UAH 5,23 to UAH 7,81 per kWh.
News from the wholesale electricity market
Ukrenergo intends to hold new auctions for balancing capacity at the end of this year or at the beginning of the next year
NEC Ukrenergo may hold additional long-term auctions for ancillary services at the end of this year or early next year after consultations with the business, said Oleksiy Brekht, acting Chairman of the Board of the company. He explained that the system operator intends to analyze why the first-ever auctions held in August failed to cover the entire need for balancing capacities. "This week and next week we want to study the current situation and understand why the second auction did not go as well as the first one, when investors pledged to close almost the entire volume of capacity we offered (99 MW). We want to discuss this with the market to feel it out,” said the CEO of Ukrenergo. As reported, in August 2024, Ukrenergo held two long-term auctions for ancillary services for the first time for 99 MW and 1000 MW. According to the results of the first auction for the provision of frequency support reserves (FSR), the need for new capacities was almost completely covered, while the second auction for the provision of automatic frequency restoration reserves covered the need by 41% for unloading and 62% for unloading/loading. The essence of the auctions was that the winners receive a contract for five years, under which the NEC undertakes to pay for the services of balancing the power system at the price established at the auction. According to the terms of the auctions, the winners must build generating capacities (gas and biomass power plants) and energy storage systems to provide these services by October 2025.
