BAKU, Azerbaijan, February 1. Gas prices remain the primary determinant of power prices across European markets, with the German Cal-24 experiencing a 60 percent decrease in value throughout 2023, mirroring trends seen in the ICIS TTF equivalent, Trend reports via ICIS, a leading provider of Independent Commodity Intelligence Services.
This correlation is expected to persist in the foreseeable future, with short-term upside risks primarily associated with tightness in the LNG market.
Regarding power-specific fundamentals, subdued demand, enhanced French nuclear output, robust hydroelectric reserves, and consistent additions to renewable energy capacity collectively contribute to the prevailing bearish market sentiment. However, these fundamentals may significantly impact price spreads between countries throughout the year.
Notably, French power prices currently exhibit a discount compared to Germany for most 2024 contracts, yet this delicate balance is closely tied to the operational status of the French nuclear fleet. Similarly, ongoing monitoring of hydropower dynamics is crucial, as it influences power systems in Southern Europe, the Balkans, and the Nordic region, thereby impacting the broader European market.
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