As a result of recession fears stemming from the trade war, combined with relatively low demand for fossil power generation, the EU ETS price reached a low last week. The (for now) weakened trade tariffs and parties taking positions with the current low price levels play an important role in the recovery currently visible. In addition, Dutch and European figures have been published on emissions from ETS companies. While Dutch figures provide practical insights into the progress of the energy transition, their use should be carefully interpreted in an ETS operating at the EU level. At the EU level, emissions reductions were greater than the emissions cap required, which may have implications for the market stability reserve and thus the ETS price in the longer term.
In the electricity market, the monthly contract in particular experienced a sharp drop in prices. The price drop on the gas market due to trading tariffs and an increase in the expected number of sunshine hours are responsible for this. The annual contract is also under pressure, although to a lesser extent. The need to fill relatively empty gas reserves is putting a floor on the gas price for the time being, which is feeding through to the electricity price. In the imbalance market, an extreme price level of EUR 1,895/MWh was reached several times on April 10. This phenomenon is difficult to separate from the fact that purchasing on the day-ahead market is divided into hourly trading blocks. With an upcoming change of trading blocks from an hour to 15 minutes, the risk of these extreme imbalance prices should decrease.