Italian Hydro Reservoirs Rise but Widen Deficit On Year

Italian hydro stocks over 20-26 May (week 21) moved up at a slower pace last week, albeit rising for the fourth consecutive week -, with stocks widening their deficit on the year to the highest since flipping from a premium in week 17. Stocks could be weighed down this week and next week as temperatures are forecast above the 30-year norm – raising cooling demand- but Italian gas stocks are high, which could support gas-fired generation.

• Hydro reservoir levels were at 2.45TWh of capacity, up by 0.12TWh on the week, compared to a 0.17TWh weekly gain in week 20. This is the slowest weekly rise since week 19, Entso-E data show.
• Despite rising again, stocks widened their deficit to the same week in 2023 to 0.44TWh from 0.36TWh – a yearly high so far in 2024.
• The difference to the 5-year average also widened to 0.32TWh from 0.28TWh, although the deficit to 5-year min narrowed to just 0.06TWh.
• Italy generated around 1.35TWh of hydro over 20-26 May, unchanged on the week, as PV and wind generation climbed to 735MWh and 380MWh, respectively, from 701MWh and 234MWh in the previous week, Terna data show.
• This led to thermal output dropping to 1.53TWh from 1.77TWh in week 20.
• Italian natural gas storage rose over the past week to 147.7TWh, or 74% full, in the week of 28 May compared with the 5-year average of 61% for this time of year, according to Gas Infrastructure Europe. A week earlier it was at 72% of capacity.
• Hydro stocks could be dented this week (27 May-2 June) as Italian power demand is forecast to rise on the week to around 29.33GW from 28.93GW over 20-26 May.
• Max temperatures in Rome are anticipated between 23-28C over 31 May-8 June.