September 6, 2018 / 9:12 AM / 2 years ago

EUROPE POWER-Coal, carbon gains drive year-ahead power contracts to new highs

PARIS, Sept 6 (Reuters) - European electricity contracts for year-ahead delivery hit new contract records on Thursday driven by strong gains in carbon emissions and coal prices, while prices for day-ahead delivery fell on forecasts for increased wind and nuclear power supply.

* German 2019 delivery, Europe’s benchmark, rose over 2 percent to a new contract high of 52.75 euros ($61.03) a megawatt hour (MWh).

* Germany’s 2020 delivery price was up 2.2 percent at 48.20 euros/MWh, a new high. The 2021 position gained 1.3 percent to 45.75 euros/MWh.

* The French Cal’19 position gained 2.2 percent to a fresh contract record of 58.10 euros/MWh. The 2020 delivery contract hit a new high of 52 euros.

* “Strong coal, emissions and gas are the main drivers,” a trader said.

* European December 2018 expiry carbon allowances, which operators must hold for their carbon emissions, soared nearly 4 percent to 21.16 euros a tonne.

* Carbon prices have risen sharply in recent weeks on EU reforms that aim to tighten supply from next year, prompting operators to make covering purchases early.

* European delivery AP12 coal for 2019, another big cost for power generators, was up 1.7 percent at $96.25 a tonne, a new contract high.

* In the day-ahead market, prices fell on Thursday on forecasts showing a rise in wind power production in Germany and increased nuclear availability in France, while demand will drop ahead of the weekend.

* The German baseload contract for Friday delivery fell 4.7 percent to 62.50 euros/MWh.

* The equivalent French day-ahead delivery slipped 3.7 percent to 64.50 euros/MWh.

* German wind power production is expected to rise to 8.7 gigawatts (GW) on Friday from 5.3 GW the previous day, according to one forecast.

* French nuclear power availability, at 73 percent of capacity, is expected to improve further with the planned restart of EDF’s 1,500-megawatt (MW) Chooz 1 reactor later on Thursday.

* French power consumption will dip by 600 MW on Friday to 46 MW. Demand in Germany will fall to 61.8 GW from 63 GW the previous day, according to Thomson Reuters data.

* In eastern Europe, Czech Thursday spot was untraded. The year-ahead contract gained 3.5 percent to a new high of 53.90 euros. ($1 = 0.8603 euros) (Reporting by Bate Felix; Editing by Dale Hudson)

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