December 24 EU ETS Flips Green on Low Wind Forecast, High German Demand

The December 2024 EU ETS contract has flipped into green territory, after having been down for most of the morning session as wind forecasts point to lower wind on the year in July in northwest Europe, while German demand is expected to rise, according to BNEF. And maximum temperatures in Berlin and Rome could spur a rise in cooling demand.

• Germany Base Power JUL 24 up 1.9% at 75.2 EUR/MWh
• EUA DEC 24 up 2.5% at 68.35 EUR/MT
• German power demand is anticipated to increase by 3% on the year in July and 2.1% over summer 2024, with hourly demand in July climbing to a peak of 63GW and averaging 50.2GW across the entirety of the month, according to BNEF.
• In contrast, German wind output is expected to drop 19.8% on the year in July – which could raise the need for gas and lignite-fired generation in the country.
• German lignite-fired generation averaged around 7.54GW compared to 6.33GW in May – the highest since March, with gas-fired output remaining firm at 4.56GW from 4.76GW in May, data from Entso-E show.
• Maximum temperatures in Berlin are expected to reach as high as around 30C over the weekend – which could raise cooling demand – but will begin tapering off to about 20-25C over 1-2 July.
• In Italy, wind forecast by BNEF suggests that Italian wind is expected to fall by 3.7% on the year in July – which could also support power prices and raise gas generation.
• Italian gas-fired generation averaged around 8.42GW in June, up sharply from 6.46GW in May and 6.74GW in April amid lower onshore wind.
• And in Rome, maximum temperatures are forecast to reach as high as 30-31C over 29 June- 1 July before falling to 26C on 3 July, according to ECMWF model. Temperatures will rebound after to a high of 30C on 6 July.