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Fall in electricity markets prices in
march due to the coronavirus crisis
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AleaSoft, April 2, 2020. The electricity markets prices fell across Europe in the recently ended
March. The decrease in demand as a result of the measures taken to contain the COVID‑19 as well
as the decrease in gas and CO2 prices are the main causes of this decrease, according to the
analysis carried out at AleaSoft. The decrease in prices was also favoured by the increase in
renewable energy production in several markets, mainly the solar energy production.
Photovoltaic and solar thermal energy production and wind energy
production
The solar energy production increased in most markets in the month of March, in year‑on‑year terms.
In Germany there was an increase of 29%. In addition, in that market on March 23 the maximum daily
production of the first quarter of the year in the history (https://aleasoft.com/price-drop-markets-
coronavirus-crisis-high-renewable-energy-production/) was registered. In Portugal the average
production rose 7.3%, setting the historical record for the first quarter of the year on the 26th. In the
Iberian Peninsula there was an increase of 2.8%, while in France the decrease was 7.6%.
Compared to February 2020, the solar energy production rose in all the analysed electricity markets.
The most notable increases were 130% of Germany and 33% of France. Meanwhile, in Portugal and
Italy the increases were 10% and 11% respectively.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Monthly-solar-photovoltaic-
thermosolar-energy-production-electricity-Europe.png)Source: Prepared by AleaSoft using data from ENTSO-E,
RTE, REN, REE and TERNA.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Solar-photovoltaic-
production-profile-Europe.png)Source: Prepared by AleaSoft using data from ENTSO-E, RTE, REN, REE and TERNA.
In the case of the wind energy production, the greatest variation was 25% of Portugal. Another of the
registered increases occurred in France, in this case being 3.6%. In the Italian and German markets
there were falls of 21% and 12% respectively.
Compared to the second month of 2020, the generation with wind technology fell significantly in several
markets. In the German market the drop was 35%. In France and Italy it decreased 28% and 25%
compared to the average values of February. On the other hand, in the Portuguese market there was a
recovery of 56%.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Monthly-wind-energy-
production-electricity-Europe.png)Source: Prepared by AleaSoft using data from ENTSO-E, RTE, REN, REE and TERNA.
Electricity demand
During the month of March, what marked the trend in electricity demand in the European markets was
the year‑on‑year decrease in electricity consumption in the industrial and commercial sectors due to the
measures established by each country to curb the spread of the coronavirus. Despite the drop in
average temperatures of more than 1 °C in most markets, the demand profile fell significantly during the
business hours and led to a general decrease. Among the most significant decreases are those of Italy,
Belgium and Spain, which were 10%, 7.0% and 4.4% respectively. Other declines were 3.2% in France
and 3.0% in Great Britain.
As for the comparison of the demand of last March with respect to that of February 2020, the fall was
abrupt in many markets. The main drop occurred in Italy, where it decreased by 14%. The decreases in
France and Belgium followed that of Italy, being 10% and 9.0% respectively.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Monthly-electricity-demand-
Europe.png)Source: Prepared by AleaSoft using data from ENTSO-E, RTE, REN, REE, TERNA, National Grid and ELIA.
The demand of Italy followed the course of the measures taken to counteract the coronavirus infections.
From the declaration of national confinement, the curve decreased.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Electricity-hourly-demand-
Italy-coronavirus-effect.png)Source: Prepared by AleaSoft using data from TERNA.
In the case of the Belgian market, the evolution of the demand marks a downward trend from the
measures taken on March 10, among which is the cancellation of classes in schools. Another quite
marked difference with respect to the demand of the corresponding week of 2019, was the one that was
evident after the confinement declared as of March 18.
(https://aleasoft.com)
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Electricity-hourly-demand-
Belgium-coronavirus-effect.png)Source: Prepared by AleaSoft using data from ELIA.
Mainland Spain, photovoltaic and solar thermal energy production
and wind energy production
In March, the electricity demand of Mainland Spain fell 4.4% compared to March 2019. According to
REE, once the effects of temperature and labour were corrected, the variation was ‑6.1%. Comparing
the demand of March with that of February of this year, there was a decrease of 6.4%. The average
temperatures of March 2020 were similar to those of February and those of March of last year, so the
main cause of the decrease is the measures that were adopted to stop the expansion of the coronavirus,
mainly in the second half of the month, after the Government decreed the state of alarm on March 14.
An observatory (https://aleasoft.com/energy-markets/mibel-spain-prices-demand/) was set up on the
AleaSoft website where it is possible to track the impact on the demand for this reason.
The solar energy production as a whole increased 2.0% year‑on‑year in March 2020. However, if each
component is analysed separately, the solar photovoltaic energy production increased 33%, while the
solar thermal energy production decreased 48%. Compared to February 2020, both technologies had
a similar increase, of 2.8% in the case of the photovoltaic energy and of 2.7% in the case of the solar
thermal energy.
The wind energy production registered increases with respect to February and also with respect to
March of last year, of 24% and 15% respectively.
The nuclear energy production fell 0.8% in March compared to March 2019. One of the factors that
influenced this decrease was the high wind energy production between February 29 and March 2
(https://aleasoft.com/record-wind-energy-production-spain-2020-lowered-prices-mibel-market/) that
caused that less energy was produced with nuclear technology during those days. On the other hand,
(https://aleasoft.com)
the Almaraz I nuclear power plant postponed its 27th recharge due to the state of alarm in which Spain
is currently. The recharging is delayed until the time when the country’s sanitary conditions allow it. A
shorter‑range stop was scheduled to refuel on April 14.
The production with combined cycle gas turbines fell 36% compared to March of last year and 46%
compared to February of this year. The production with coal also fell in the two comparatives, 40%
compared to March 2019 and 44% compared to February.
On the other hand, the hydroelectric energy production recovered 48% compared to that of the same
month of last year. Compared to February, the increase was 4.2%.
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Monthly-electricity-balance-
Spain-demand-production.png)Source: Prepared by AleaSoft using data from REE.
In March, the hydroelectric reserves rose 21% year‑on‑year and during these first three months of
2020 they remained above the level accumulated in the same months of 2019. On the other hand, they
suffered a fall of 0.8% compared to that accumulated in February 2020.
European electricity markets
In the recently concluded month of March, the prices of the European electricity markets fell generally
compared to the average values in March 2019. According to the analysis carried out by AleaSoft, the
(https://aleasoft.com)
main cause of this decrease is the drop in demand. Despite the fact that the temperatures were colder in
all markets, the electricity demand decreased year‑on‑year in most markets, due to the expansion of the
coronavirus in Europe and the containment measures approved by the different European governments.
The decrease in gas, coal and CO2 emission rights prices also favoured the fall in prices. The average
price of TTF gas in the spot market was 45% lower in March of this year than in March of last year. In the
case of coal, the decrease was 29% when comparing the average value of March 2020 compared to
March 2019. While the year‑on‑year drop in the case of the CO2 emission rights was 10%. In some
markets the fall in prices was also driven by increased production with renewable energy.
The greatest year‑on‑year decline was in the Nord Pool market of the Nordic countries, of 78%. This
market was also the one with the lowest average price during the month of March, with a value of
€9.01/MWh. The low prices in this market are also a product of the high availability of hydroelectric
energy. While the smallest year‑on‑year decline was in the EPEX SPOT market of Germany, of 27%.
However, this market had the second lowest average price of the month, of €22.49/MWh. On the other
hand, the N2EX market of Great Britain, with an average of €35.53/MWh, was the market with the
highest average price in Europe in March 2020. The second market with the highest price was the IPEX
market of Italy, with a price of €31.99/MWh. The largest decreases occurred in this market, of 21% and
10%, respectively, in wind and solar energy production.
When comparing the prices of the month of March with those of the month of February of this year, the
monthly average decreased in all European markets except the EPEX SPOT market of Germany, where it
increased by 2.6%. In this comparison, the Nord Pool market of the Nordic countries was also the one
with the greatest decrease, with a decrease of 31%. While the market with the lowest decline was the
N2EX market of Great Britain, of 2.4%.
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Table-electricity-market-
price-demand-temperature.png)
Iberian market
In the month of March 2020, the average price in the MIBEL market of Spain and Portugal decreased by
43% compared to the same month in 2019. As a result of these decreases, the(https://aleasoft.com)
average price in the
MIBEL market of Portugal was €27.86/MWh, while in the case of Spain the price was lower, of
€27.74/MWh.
This behaviour is related to the increases of 17% and 2.7% registered in the wind and solar energy
production of the Iberian Peninsula, respectively. But the main cause of the decrease in prices in the
case of Spain is the state of alarm decreed by the Spanish Government on March 14 to stop the spread
of the coronavirus, causing a year‑on‑year decrease in electricity demand of 4.4%, in addition to the fall
in gas and coal prices.
On the other hand, last March, the MIBEL market of Spain and Portugal was the second European
market with the largest decrease in prices, of 23%, compared to February 2019.
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-European-electricity-market-
prices.png)Source: Prepared by AleaSoft using data from OMIE, EPEX SPOT, N2EX, IPEX and Nord Pool.
Electricity futures
The month of March in the European electricity futures markets was characterised by marked price
drops. In the case of the product of the second quarter of 2020, in relative terms, the most notable drop
was that of the ICE and NASDAQ markets of the Nordic countries, which between the beginning and the
end of the month reduced their price by almost half. This product ended up being traded in the last
market session of March at €6.00/MWh and €6.46/MWh respectively. In the rest of the markets the
decreases in absolute terms were between €7.06/MWh and €10.40/MWh, which represented decreases
of between 21% and 36%. The least‑changing market was Great Britain’s EEX.(https://aleasoft.com)
In the case of the electricity futures for the 2021 calendar year, a situation very similar to that of the
Q2‑2020 product occurred during the month of March. A general decline was observed where the
Nordic region had the highest difference percentages. While the markets of the Nordic countries
reduced their price by a quarter during the month, the rest of the markets registered decreases that are
around 10%. The EEX market of France is the one that registered the least change with a decrease of
5.6%.
It is noteworthy that one of the most influential factors in these declines is the impact on electricity
demand that the countries registered due to the effect of the confinement measures aimed at slowing
down the spread of the coronavirus.
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Table-settlement-price-
European-electricity-futures-markets-Q1-and-Y1.png)
Brent, fuels and CO2
The Brent oil futures prices for the month of May 2020 in the ICE market started last month registering
the monthly maximum settlement price, of $51.90/bbl, on March 2. But the prices fell throughout the
month to reach the monthly minimum settlement price of $22.74/bbl on March 31. This represents a
decrease of 56%. Furthermore, this settlement price is the lowest registered for this product at least
since spring 2014. On the other hand, the monthly average price was $33.73/bbl. This value is 39%
lower than that reached by the futures for the month M+2 in February 2020, of $55.48/bbl, and 50%
lower than that corresponding to March 2019, of $67.03/bbl.
In March, the evolution of Brent oil futures prices was mainly influenced by the expansion of the
coronavirus globally and the measures adopted by the different governments to try to stop the
pandemic.
On the other hand, after the failure of the OPEC+ meeting of March 6, not only the expectations that
further cuts in production might rebalance the market were frustrated, but a trade war between Russia
and Saudi Arabia was also declared. Both countries announced their intention to significantly increase
their production in April, which in a context in which demand is low and the storage capacity is very
limited, may further lower the Brent oil futures prices in the month of April. In fact, the futures for M+2
started this month with a 6.1% drop compared to the settlement price of the previous day, positioning at
$24.74/bbl. At the moment in today’s session, April 2, they recovered and are being negotiated above
$25/bbl. (https://aleasoft.com)
The TTF gas futures in the ICE market for the month of April 2020 reached their monthly maximum
settlement price of €9.37/MWh on March 11. Subsequently, the prices fell until the monthly minimum
value of €6.90/MWh was registered on March 30. This settlement price is the lowest in the last five
years. Compared to the futures for the month M+1 of February 2020, the average settlement price in
March, of €8.46/MWh, decreased 7.1% with respect to the average for the month of February, of
(https://aleasoft.com/subscription-weekly-news-summary/)
€9.11/MWh. When compared to M+1 futures traded in March 2019, when the average price was
€15.70/MWh, the decrease was 46%.
(https://aleasoft.com/should-nuclear-energy-be-cces-were-registered-european-electricity-markets/)
In the case of the spot market, last month TTF gas prices reached their maximum index price of
€9.56/MWh on March 16. But during the second half of the month, the prices fell to an index price of
€7.12/MWh on March 31. On the other hand, the average price for this month of March was €8.62/MWh,
6.9% lower than that of February 2020, €9.26/MWh, and 45% lower than that of March 2019, of
€15.73/MWh. The prices in April continued to drop and on April 2 they settled at €6.94/MWh, the
historic low since at least October 2008. About
Contact
The declining demand due to the COVID‑19 crisis further lowered gas prices that, before the pandemic
was declared, were already low due to oversupply.
Markets
The API 2 coal futures prices in the ICE market for the month of April 2020 remained stable at around
$47.78/t in the first twelve days of the month.AleaModel
Later, the prices rose to reach the monthly maximum
settlement price of $54.45/t on March 25. But in the last days there was a downward trend and the
Privacy policy
settlement price of March 31 was $49.30/t. The monthly average price was $49.57/t, 1.2% higher than
the average price of API 2 coal futures for theLegal
monthnotice
M+1 of February 2020, of $48.99/t, but 28% lower
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The CO2 emission rights futures prices in the EEX market for the reference contract of December 2020
AleaSoft Madrid
started the month of March with values around €23.62/t and reached the monthly maximum value of
Paseo de la Castellana, 79, 6.ª 28046 Madrid
€24.09/t on March 10. Subsequently, the prices began to drop until reaching the monthly minimum
(+34) 900 10 21 61
settlement price of €15.30/t on March 18. The average price in March was €19.89/t, 18% lower than
that of February, of €24.18/t. When compared to the average for the month of March 2019 for the same
product, of €22.43/t, the average for March 2020 is 11% lower.
The decreases registered in the CO2 emission rights futures prices during the past month of March are
related to the spread of COVID‑19 across Europe and the containment measures approved by the
European governments, which limited the mobility and the industrial production.
(https://aleasoft.com)
AleaSoft Barcelona
Viladomat, 1, 1º-1ª 08015 Barcelona
(+34) 932 89 20 29
(https://aleasoft.com/wp-content/uploads/2020/04/20200402-AleaSoft-Prices-gas-coal-Brent-oil-
CO2.png)Source: Prepared by AleaSoft using data from ICE and EEX.
Coronavirus energy crisis: follow‑up and recommendations
Contact us
Given the repercussion that the coronavirus crisis is having, AleaSoft developed an observatory on the
Mainland Spain electricity demand (https://aleasoft.com/energy-markets/mibel-spain-prices-demand/)
with
Name data
* updated daily.
This global crisis caused falls in the consumption of electricity and gas and consequently in the prices of
the energy markets. Faced with this uncertainty, the need for reliable forecasting of demand and prices
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(https://aleasoft.com/products-and-services/energy-price-forecasting/) that are systematically adapted
to the changing situation is reinforced.
Company
On * hand, at AleaSoft it is considered that a measure that the Government of Spain may take to
the other
alleviate the effects of the coronavirus crisis is the elimination of the Tax on the Value of the Production
of Electric Power (https://aleasoft.com/aleasoft-estimates-increase-between-2-5-electricity-market-
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price-due-reintroduction-generation-tax/) (IVPEE for its acronym in Spanish), better known as the 7%
tax to the electricity generation. In this way, in addition to favouring the consumers and generators, the
export of electricity would be stimulated.
Source: AleaSoft Energy Forecasting.
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