Forecasts of strong renewable generation and warm weather put downward pressure on wholesale electricity prices

As the international energy portal Montel reports, forecasts of strong renewable energy generation through mid-April are putting downward pressure on short-term electricity forward prices. Combined with the currently prevailing warmer-than-average weather, which is reducing energy consumption for heating, this is helping the EU keep its gas storage levels very healthy. This is also putting downward pressure on long-term forwards. However, the high price of emissions allowances is limiting any more significant decline in electricity prices.

Strong renewable generation in Germany

German solar power output fed into the grid is expected to range between 10-15 GW this week, reaching as much as 21-25 GW on some days. The long-term average for this time of year is around 7.2 GW, according to Montel. Next week, however, output is expected to return to around the long-term average.

As for wind power output fed into the grid, it is expected to range between 5-20 GW this week, while the long-term average is 19 GW. Generation should rise significantly the following week, however, with output forecast to range between 15-30 GW. The average for the same time of year is 16.5 GW.