German power prices slumped on Friday, with the front year hitting a fresh two-year low amid flagging gas prices and forecasts for mild, windy weather.
The Cal 24 slumped to EUR 87.84/MWh, the lowest since September 2021. It was last seen down EUR 1.50 at EUR 88.05/MWh.
Meanwhile, the front month was last seen down EUR 0.90 to EUR 83.05/MWh, while the front-quarter contract traded EUR 1.55 lower at 84.50/MWh, a six-month low.
“Mild temperatures and expected high wind output are putting January prices under pressure due to gas prices also being weighed down,” one trader said, noting that the Cal 24 was reflecting the downward pressure from the near-term contracts.
On the weather front, temperatures in Germany should average 4.1C over the next fortnight, 2.2C above normal, data from Montel’s Energy Quantified (EQ) showed. Wind output, meanwhile, should average 33.6 GW over the same period, 10.6 GW higher than normal.
The latest outlook suggested there would be relatively modest demand for gas for heating at a time when storage levels were close to 90% full.
In gas trading, the benchmark TTF front month last traded EUR 1.29 lower at EUR 33.24/MWh on Ice Endex.
“There is potentially further downside for gas prices, but I do not see the front year dropping much further from here,” another trader said, adding that prices could consolidate around current levels for the remainder of the year.
Day-ahead prices drop
In the day-ahead market, prices dropped amid expectations of higher wind output and lower demand.
Baseload for Saturday settled at EUR 70.70/MWh, down EUR 22.54 on Thursday’s settlement, while the peakload contract settled EUR 20.69 lower on the day at EUR 80/MWh.
Wind power production in Germany should rise 6.6 GW to 23.8 GW tomorrow, 0.9 GW above the norm, according to EQ. Power demand, meanwhile, should fall 6.1 GW to average 52 GW, 1.4 GW above normal.