Power price for next year once again exceeds 100 EUR/MWh
The wholesale power price for next year has once again exceeded the 100 EUR/MWh threshold in response to rising natural gas prices. Gas prices surged in the first half of the month. Higher power prices are also being supported by the rising carbon allowance price. However, European gas storage facilities are well stocked, and Europe continues to secure new liquefied natural gas (LNG) cargoes.
The baseload power price for 2025 on PXE has moved above 100 EUR/MWh. The market closed at 103.57 EUR/MWh on Friday. The main reason for the increase in the power price is the rise in gas prices.
Gas prices surged sharply in the first half of the month due to concerns over the continuation of Russian gas transit through Ukraine, after Ukrainian forces entered Russian territory near the last operational transit point for Russian gas exports to Europe.
The gas price at the Czech trading hub broke through the 40 EUR/MWh level at the end of July and is now approaching 45 EUR/MWh. It closed the week at 44.48 EUR/MWh. The contract for next year is at its highest level since the start of this year.
The power price is also being supported by the rising carbon allowance price. After trading at 52.2 EUR/t in February, it climbed above 70 EUR/t and ended the week at 72.52 EUR/t.
More significant price increases are being prevented by the healthy level of European natural gas storage. Storage facilities are already nearly 90% full ahead of the upcoming winter season. Moreover, Europe continues to secure LNG cargoes, despite Asian gas prices reaching 8-month highs.
Given concerns over pipeline gas supplies from Russia via Ukraine, commodity prices will increasingly respond to temperature forecasts during the heating season, or rather to gas consumption projections.
