Electricity falls further on good renewable output

Monday 18th December 2023

Market prices continue to fall across all power and gas markets. In spite of the weather turning colder and gas demand increasing (for domestic heating and also electricity generation) costs are still coming off. European markets remain well supplied – EU gas storage withdrawals have increased, but volumes still remain well in excess of the 5-year average, further enforcing the argument that Russian gas is not as critical as thought a year ago. There is no effect on energy caused by the conflict in Israel, in spite of the regional contagion fears in October. Most energy drivers – gas storage, LNG deliveries, French nuclear output, renewable output, oil price, coal price, carbon price – indicate that power and gas prices are low, and could potentially go lower. Weather forecasts are above average, and as we enter the festive period, so demand reaches a predictable trough and prices are thus supressed further.