Energy Market Analysis – 01/09/2025
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Power
European power markets demonstrated upward pressure despite mixed fundamentals, with French month-ahead contracts leading gains at 2.3% to €52.19/MWh on 22nd August. Spanish contracts widened their premium over French prices to €18.91/MWh, whilst Italian and German contracts reached two-week highs at €111.45/MWh and €86.90/MWh respectively.
Year-ahead baseload products tracked gas movements downward, with Spanish contracts dropping to €61.20/MWh and French contracts falling to €61.75/MWh, both trading below July averages. Gas-for-power demand declined significantly from 29mcm/day to 17mcm/day as wind generation increased substantially, with UK wind baseload factors rising well above seasonal norms.
Nuclear capacity improvements following maintenance periods further reduced gas demand for power generation. Weekend and day-ahead forecasts consistently showed reduced gas requirements due to enhanced renewable output and improved nuclear availability. The combination of higher wind generation and nuclear restart provided system relief across Northwest Europe.
Gas
European gas markets exhibited mixed performance through late August, with prices remaining largely rangebound despite supply disruptions.
Norwegian supply remained the primary concern, with total exit nominations falling from 306.4mcm/day to 270.3mcm/day as maintenance activities intensified across the Norwegian Continental Shelf. Key disruptions included planned maintenance at Nyhamna plant (limiting throughput to 40mcm/day) and unplanned maintenance at Ormen Lange due to compressor failure.
UK NBP and Dutch TTF contracts experienced modest volatility, with gains of 0.66-0.89% on 22nd August before declining 1.43-2.35% by 28th August amid warm weather conditions. UK nominations from Norway dropped significantly, reaching just 3mcm/day by 29th August as Troll maintenance ramped up.
Storage levels provided market comfort at 76.43% capacity despite reduced injection rates. However, German storage operator SEFE faced allocation challenges at Rehden facility. LNG sendout remained steady at 8mcm/day throughout the period, with South Hook maintaining 5mcm/day nominations whilst Isle of Grain operated at boil-off only.