ROME: The price for Italian power for Q2 2018 delivery has fallen to a 10-month low on the back of improved French nuclear output coupled with a positive hydro outlook, sources said. The Q2 2018 contract was assessed at Eur44.35/MWh ($55/MWh) Monday, to be down 7% from January 2 to a level not seen since March 31, S&P Global Platts data showed Tuesday. During January 2017, the Q2 2017 contract hit Eur44.25/MWh on January 31, up from Eur41.2/MWh on January 3. Last year the scenario was completely different with colder weather and strong spot prices,” a trader said. “Today we see the opposite: mild weather, more wind, more hydro, more nuclear and bearish gas prices.”
The latest data from Italian power grid operator Terna showed electricity imports at 3.6 TWh in December, up 95% year on year. Hydro power generation from January 2-25 hit 2.2 TWh, after totaling 2.3 TWh in December.
Spot prices have been falling since the beginning of the year, which also added pressure further along the curve,” a second trader said. “Adding to that, last year Q2 prices were up on supply constraints, but this year the supply outlook looks positive.” The Italian national single price for the day-ahead delivery contract has averaged Eur49.00/MWh in January, compared with Eur72.24/MWh in January 2017, according to market operator GME.
Power prices have fallen to multi-month lows with above-average temperatures in Italy this winter hitting demand for power generation. Looking ahead, the Weather Company has forecast warmer than average temperatures across Europe in February-April.
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