EU Power

October 18, 2019

The Research Team reviews the EU Power market

 

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18 October 2019 

  • Total production is expected to decrease into week 43. This is mainly due to the net decline increase in renewables outputs. In particular, wind power generation is expected to significantly drop. Rainfall rates will gradually decline after a very wet period (since the end of September) managed to level off the prolonged deficit observed during late Spring and Summer. On the French side, nuclear outages for the next 10/15 days have been increased relative to our previous reading, (between 1 and 2GW).
  • Demand continues to disappoint. Temperature-wise, Germany is expected to remain above-average. This trend is amplified by south-westerly winds which will bring mild air masses from the Atlantic into the continent. The exceptionally low demand is predicted to be <60GW/week, while the average of the period should range between 60+ and 65GW. A cooler phase may follow (i.e. after day 10).
  • The short-term macroeconomic environment further deteriorated in the past month. Latest figures available for the PMI indicate a drop to just above 41, 20 points down relative to the peak observed at the end of 2017. The industrial production, although a lagging indicator, confirms the underperformance of the industrial sector, with a very weak Q3. The single segments that are more related to the energy markets are performing slightly better, in particular the cement production which is on a positive m-on-m trend.
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