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POWER: German Lignite Output Seen to Replace Some Gas Output in October

POWER
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German gas-fired generation is tracking a year-on-year net decline of almost 27% to average 3.85GW so far this month, despite higher demand on the year, with lignite-fired generation is seen to be replacing some gas and coal generation. 

  • German gas-fired generation averaged 3.85GW on 1-15 October, down from 4.88GW during the same time last year and down from 4.18GW in all of September.
  • German lignite-fired generation averaged 9.06GW on 1-15 October, up from 7.3GW in the same period in October 2023, and up from 7.19GW for all of last month.
  • German hard coal-fired generation averaged 2.96GW in the first half of October, down from 3.61GW in the same period in 2023, and down from 3.04GW in all of September.
  • German power demand so far this month averaged 52.12GW, up from 49.92GW in the first half of October 2023.
  • Higher lignite-burn was also supported by lower wind/solar output year on year in the first half of October.
  • German solar PV output in the first half of October stood at an average of 5.23GW, slightly down from 5.65GW in the same period last year, and down from 8.81GW in the entire month of September.
  • German offshore wind output averaged 3.49GW on 1-15 October, down from 3.17GW in the same period in October 2023, but up from 2.53GW last month.
  • Onshore wind output averaged 12.71GW on 1-15 October, down from 17.35GW in the same period in 2023 but up from 12.44GW in September.
  • Looking forward, Germany gas-fired generation is expected to remain under pressure in the coming months with front-month spark spreads for a 55% efficient gas plant ending September at -13.54€/MWh. November spark spreads for a 55% efficient gas plant are currently trading at around -9.2€/MWh.
  • German gas-to-lignite and gas-to-coal switching may be limited regardless, as Germany is expected to close 5.5GW of coal capacity and 3.4GW lignite capacity this winter.
  • Despite that, LSEG forecasts lignite and gas-fired generation to rise winter on winter, while coal generation is expected to be stable.
    • Germany Base Power NOV 24 down 3.3% at 87 EUR/MWh
    • EUA DEC 24 down 3.2% at 62.98 EUR/MT
    • TTF Gas NOV 24 down 1.5% at 39.38 EUR/MWh
    • Rotterdam Coal NOV 24 down 2.1% at 116.5 USD/MT
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German gas-fired generation is tracking a year-on-year net decline of almost 27% to average 3.85GW so far this month, despite higher demand on the year, with lignite-fired generation is seen to be replacing some gas and coal generation. 

  • German gas-fired generation averaged 3.85GW on 1-15 October, down from 4.88GW during the same time last year and down from 4.18GW in all of September.
  • German lignite-fired generation averaged 9.06GW on 1-15 October, up from 7.3GW in the same period in October 2023, and up from 7.19GW for all of last month.
  • German hard coal-fired generation averaged 2.96GW in the first half of October, down from 3.61GW in the same period in 2023, and down from 3.04GW in all of September.
  • German power demand so far this month averaged 52.12GW, up from 49.92GW in the first half of October 2023.
  • Higher lignite-burn was also supported by lower wind/solar output year on year in the first half of October.
  • German solar PV output in the first half of October stood at an average of 5.23GW, slightly down from 5.65GW in the same period last year, and down from 8.81GW in the entire month of September.
  • German offshore wind output averaged 3.49GW on 1-15 October, down from 3.17GW in the same period in October 2023, but up from 2.53GW last month.
  • Onshore wind output averaged 12.71GW on 1-15 October, down from 17.35GW in the same period in 2023 but up from 12.44GW in September.
  • Looking forward, Germany gas-fired generation is expected to remain under pressure in the coming months with front-month spark spreads for a 55% efficient gas plant ending September at -13.54€/MWh. November spark spreads for a 55% efficient gas plant are currently trading at around -9.2€/MWh.
  • German gas-to-lignite and gas-to-coal switching may be limited regardless, as Germany is expected to close 5.5GW of coal capacity and 3.4GW lignite capacity this winter.
  • Despite that, LSEG forecasts lignite and gas-fired generation to rise winter on winter, while coal generation is expected to be stable.
    • Germany Base Power NOV 24 down 3.3% at 87 EUR/MWh
    • EUA DEC 24 down 3.2% at 62.98 EUR/MT
    • TTF Gas NOV 24 down 1.5% at 39.38 EUR/MWh
    • Rotterdam Coal NOV 24 down 2.1% at 116.5 USD/MT