(Bloomberg) -- Low wind output and colder weather are pushing power system margins to the lowest this winter in Germany, with prices likely to rise.
Germany’s power margin — a measure of the available capacity minus the expected demand — is forecast to drop to the winter’s low on Wednesday, according to Bloomberg models. That reflects plunging wind levels, which will dip below 3 gigawatts, as well as power demand creeping above seasonal norms due to colder weather.
Europe’s largest economy has been hit with multiple windless periods this season, compelling it to either burn fossil fuels or import electricity from France. These periods have seen Europe dipping into gas storage at record rates, adding to concerns about how the winter will pan out in the event of more windless periods.
Temperatures in northwest Europe are set to remain slightly below seasonal norms this week, pushing up heating demand. Meanwhile, German year-ahead power prices fell to the lowest level since mid-November on easing concerns about the rapid depletion of gas reserves.
German power for Tuesday increased 51% to €149.93 per megawatt-hour in the day-ahead auction on Epex Spot SE. The French equivalent climbed 42% to €126.21, while the Spanish contract doubled according to data from Omie.
(Updates with exchange prices)
©2024 Bloomberg L.P.