12 March 2020
- After the record levels output (wind power) recorded between week 5 and week 9, the weather has become more volatile. Current week will see high production numbers (i.e. close to 700 GWh), while a net drop is expected during week 12. Our precipitation index is about to reach a +70mm anomaly (past three months). This is quite a respectable number – a significant deficit (i.e. strongly negative index), which would be capable of disrupting supply on different levels, should be therefore excluded for the entire Q2. Revised French outages jumped by 1 GW since our last reading, increasing the short-term tightness over western Europe.
- Demand will continue to perform poorly. Temperatures are still expected to stay above average for most of the continent, albeit less significant than what we recorded a few weeks back. A high pressure cell is forecast to amplify and shift towards the North Atlantic and northern Europe at the end of week 12. If verified, this should improve demand (i.e. cool trend), sending it close to the nom of the period.
- The macroeconomic conditions have not deteriorated further. In fact, some indicators (see the PMI, for example) continue to signal a slow but consistent improvement. The first Q1 data on industrial production confirm such a trend. However, looking at specific sectors, the freshest data we hold do not support a rosy scenario. The current crisis associated with the coronavirus will likely jeopardize the performance of the next 1/2 quarters