Electricity: Ukraine and Europe October 9 - 13, 2023
Ukrainian Energy Exchange: bilateral contracts market
Last week, UEEX held 12 auctions for the purchase/sale of electricity in the unilateral auction mode, including 6 in commercial sections and 6 in specialized sections. The initiators were: Guaranteed Buyer, Centrenergo, Ukrhydroenergo, SHAMRAIVSKYI TSUKOR LLC, USPs and DSOs, etc.
Centrenergo initiated auctions in accordance with Article 66 of the Law of Ukraine "On the Electricity Market", offering baseload for delivery in the second decade of October. The company was able to sell 32160 MWh of baseload at a weighted average price of 3709,63 UAH/MWh.
Ukrhydroenergo initiated auctions where it offered block positions with a delivery period in October. As a result, 7830 MWh of block positions (8-16) were sold at a weighted average price of 3230 UAH/MWh, 400 MWh of block positions (24-7) at a weighted average price of 2400 UAH/MWh with a delivery period of October 13-22, and 3843 MWh at a weighted average price of 3304,92 UAH/MWh with a delivery period of October 17-23.
Shamraivskyi Sugar initiated an auction offering baseload with a delivery period in October, selling 409 MWh at a weighted average price of 3644 MWh.
During the reporting period, the Guaranteed Buyer initiated auctions, offering block positions with delivery in October. According to the results of the auction, the company sold 128600 MWh of electricity during daytime hours at prices in the range of 1932,48 - 3234,27 UAH/MWh for the delivery period of October 16 - 31, 9690 MWh of block positions (1-7) at prices in the range of 2200 - 2290,93 UAH/MWh.
In the commercial sections, the companies bought/sold electricity with individual profiles load.
| Trades type | Sales volume, MWh |
|---|---|
| Auctions pursuant to Article 66 of the Law of Ukraine On Electricity Market | 44 642 |
| Commercial section | 82 738,685 |
| Special sessions for the sale of electricity generated from alternative energy sources | 138 290 |
| Totaly | 265 670,685 |
As of October 13, prices for the most commonly used types of sales schedules were formed, as shown in the chart.
Market Operator: day-ahead and intraday market
During the reporting period, prices were dynamic, ranging from UAH 3224,56 to UAH 5148,6/MWh, within ±22% deviation from the weekly average. In general, the average weighted price for the last week increased compared to the same indicator of the previous week and amounted to UAH 4339,86/MWh (+4,6%). In total, 318,15 thousand MWh were sold on the DAM during the reporting period (+5,2%).
During the reporting period, prices on the DAM were even more dynamic. Weighted average prices varied in the range of 3119,00 - 5331,06 MWh, and the average value of the weighted average prices for the reporting period increased by 2,5% compared to the same period last year and amounted to 4643,22 UAH/MWh. The total volume of sales and purchases for the reporting period amounted to 47,30 thousand MWh.
European market
Last week, prices on European electricity markets resumed their upward trend, driven by rising natural gas prices, which reached a seven-month high in the middle of last week, exceeding 50 EUR/MWh.
Solar power generation declined in all markets analyzed, except Spain. Electricity generation from wind turbines in Europe in the first four days of last week provided 16,1% of the region’s needs, according to the WindEurope Association. The leading countries were Germany and Sweden.
Demand dynamics in most of the markets analyzed last week were mixed. For example, in Spain, where the National Day of Spain was celebrated on October 12, it declined. During the second week of October, average temperatures fell by 1.6-0.2°C in most of the markets analyzed, which led to an increase in demand. The largest growth was recorded in the UK market.
As for hourly prices, on Monday, October 9, hourly prices above 200 EUR/MWh were recorded on the markets of Germany, Belgium, France, Italy and the Netherlands. On that day, the Spanish and Portuguese markets reached a price of 184,50 EUR/MWh from 08:00p.m. to 09:00p.m., which was the highest price recorded on these markets since March. On the UK N2EX market on Monday, October 9, from 07:00p.m. to 08:00p.m., a price of £184.24/MWh was recorded, which was the highest since August. At the same time, on the weekend of October 7, negative prices were recorded in the Scandinavian market.
As of October 13, the price of basic electricity in France amounted to 69,53 EUR/MWh, in Hungary 141,09 EUR/MWh, in Poland 95,15 EUR/MWh. As of November 2023, electricity was trading in the range of 105-138 EUR/MWh.
Monthly electricity futures for December 2023 increased by an average of 3,4% in Hungary and France and decreased by 1% in Poland. As of January 2024, prices in Hungary and France increased by 13% on average.
Futures contract prices, EUR/MWh, 12.10.2023
| Type | Contract | Date | France | Hungary | Poland |
|---|---|---|---|---|---|
| Base | Моnth | Nov/23 | 131,78 | 138,03 | 105,33 |
| Dec/23 | 140,73 | 138,08 | 104,39 | ||
| Jan/24 | 161,67 | 153,73 | - |
Last Monday, European carbon prices showed a slight increase compared to the sharp rise in the energy sector caused by rising geopolitical tensions in the Middle East and new threats to Australian LNG. On Thursday, October 12, prices for CO2 futures on the EEX market for the benchmark December 2023 contracts reached a settlement price of EUR 85,23 per ton, up 6% from the previous figure.
Market experts predict that EUA prices in the region’s carbon market will generally remain in the current range for the next two years and then resume an upward trend from 2026 as the market operates on additional supply provided by the EU’s REPowerEU initiative.
Thermal coal spot price in Europe (API-2) in Thursday, October 12, reached 127,54 EUR/ton, that is 10,5% higher than the previous indicator.
Last week, some consumers in Donetsk, Zaporizhzhia, Sumy, Kharkiv, Kherson, and Chernihiv regions lost power as a result of hostile shelling. Exports/imports were carried out to/from Slovakia and Moldova.
Public procurements
Over the past week, more than 40 electricity procurement tenders were held by customers. Sold volume of the 10 largest contracts amounted to 3,12 million kWh for a total value of UAH 15,07 million excluding VAT. The average price amounted to UAH 5,04 per kWh, excluding VAT. The largest contract was awarded to Dnipro Energy Services LLC, which will supply 500,000 kWh of electricity to the Feofaniya Clinical Hospital of the State Administration of Affairs at an initial price of UAH 4,43 per kWh, excluding VAT. Other tenders are shown in the graph below. Prices ranged from UAH 4,43 to UAH 6,83 per kWh.
Wholesale electricity market news
Ukrainian power system has 8 power units. The ninth power unit of the nuclear power plant will soon be connected. This was reported by the Ministry of Energy. "At one of the country’s nuclear power plants, a nuclear unit came out of repair four days ahead of schedule. It will strengthen the power system with an additional 415 MW of capacity, running on Westinghouse nuclear fuel. It should be added that this is the eighth nuclear unit to be repaired during a large-scale repair campaign in the energy sector. Another one - the ninth - will be connected in the near future," the Ministry of Energy said. As ExPro reported earlier, Energoatom plans to operate all available equipment during the heating season - 9 NPP units. The capacity is 7.4 GW.
Norway will consider imposing tariffs (on CO2 emissions) on certain imported goods, to ensure that foreign products do not affect the country’s transition to green energy, Norwegian Finance Minister Trygve Slagsvold Vedum said on October 12, Energobusiness reports.
The consultation process on the German federal government’s strategy for power plants is due to start in October, said Stefan Wenzel, parliamentary state secretary at the Federal Ministry of Economic Affairs and Energy (BMWK), on Thursday. The power plant strategy is intended to stimulate the construction of about 24 GW of gas-fired power plants. The strategy will continue to be intensively discussed with the EU Commission.
NEURC reported that at its meeting on October 10, 2023, it adopted a resolution "On Approval of the Structure of the Distribution of the Capacity of the Ukraine-Hungary Interstate Crossing". The structure of capacity allocation for the auctions in the Ukraine-Hungary cross-border direction was determined by the transmission system operator, agreed by the Hungarian transmission system operator and approved by the Regulator in the amount of: 0% for annual auctions, 0% for monthly auctions, and 100% for daily auctions.
