Friday, 06 January 2023
Highlights
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According to the statistics from our data partners, activity this week picked up this week but is still behind pre-Christmas levels.
This week's trading activity focused on 2022 and 2023 production contracts (same as last week and week 51), with 42% (-9% points) and 49% (+19) share of transactions respectively. No trades for 2021 and 2024 were witnessed, and a negligible amount for 2025.
Nordic region GOs prices experienced various trends this week. The average 2022 Nordic Hydro GOs closed the week with a decreasing price of around 609 Eurocents/MWh, -16 Eurocents/MWh compared to last observed price in W51 (-3%).
On the contrary, forward prices continue to go up: 2023 Nordic Hydro closed the week with a 30 Eurocents gain, thus increasing its advantage over its 2022 counterpart. This is expected to grow in the weeks to come.
As for the 2025 vintage ( we didn't have any 2024 trades), it closed the week slightly above its value in W50, by +8 Eurocents/MWh.
This week, Nordic reservoir levels were down again, by 0.9% when compared to last week. They are thus still below normal levels (by 4.1 percentage points now, versus -6 last week), after a few weeks of bad precipitation levels (weeks 50 and 51), with only 47 and 81% of normal levels in terms of precipitation.
The Nordic reservoir levels, therefore, end 2022 higher than 2021 (by 5.4 percentage points and are forecasted to start 2023 slightly above 2022 levels.
As for Nordic Hydro GO, EU Hydro went down for its 2022 production. It closed this week at 652 Eurocents/MWh, versus 657 two weeks ago.
This week, reservoir levels increased by 4.4% in the Iberian Peninsula and by 2.2% in Central Western Europe. It reflects well the current above-normal condition in the Iberian Peninsula in terms of precipitation, especially in the Iberian Peninsula (weeks 50 and 51 notably). Forecasts for the next weeks for the Iberian Peninsula are giving quite some optimism, as levels are supposed to reach around 57% by W4 of 2023, above normal, 2021 and 2022 levels. Hydro production is still above normal levels, explaining part of the only small increase in reservoir levels.
This week's activity was, as expected, closer to pre-Christmas levels than last week. Demand is thus expected, as it does every beginning of the year, due to the comeback of market participants after the Christmas vacation, to continue to increase. We keep our forecast unchanged and expect prices to remain within a 5.5-6.5 Euros/MWh window, at least until mid-January.
The first week of 2023 saw a slight increase in the UK RGGO Crop price, the midpoint sitting at 15.4 GBP/MWh, with the spread also narrowing to 75 p. Waste prices stayed stagnant as did the spread at 2 GBP. For European Biomethane, the uncertified Waste product was quoted at 33 EUR/MWh, a slight increase over the 2022 year end price but still below the UK Waste RGGO price.
The Portuguese government also released its plans (4 January 2023, Ordinance 15/2023) to launch auction schemes for renewable energy procurement, including biomethane. The reference price looks to be set at 62 EUR/MWh.
For more information related to the Biomethane market please contact kevin@greenfact.com
Should you have any remark, question, or inquiry regarding this Weekly Overview, feel free to reach out to leo@greenfact.com