EU Hydro price November

The EU Hydro 2022 increased by 270 Eurocents (+53.6%) during the month, while the 2023 vintage price landed on a slightly lower level (730 Eurocents) with an increase of 209 Eurocents. The 2021 vintage also saw a steep increase in the price although in an environment of low liquidity. Considering that these prices are Volume Weighted Average Prices (VWAP), it is important to note that some trades closed at a price of as high as 885 Eurocents.

November's VWAP monthly prices keep the steep increasing trend that is observed since July and set a new record price for the year. In addition, it is safe to say that the rate of the monthly increase of the price picks up as the difference between November and October is almost double that of the difference in the prices between October and September.

As regards the spreads, the steeper increase of the price of the 2022 vintage resulted in a spread of -42.51 Eurocents compared to the 2023 vintage while the spread for 2021 exceeded the price of 210 Eurocents. It is important to note the spread of 22/23 fell to negative levels again in November after spending a month in positive levels during October.

In November, there was a steep decrease of the share of EU Hydro 2022 in the total volume of EU Hydro GOs traded compared to October. More specifically, the share almost halved to 46.6% in November from an 82% share in October and EU Hydro 2023 covered the gap. Notable is the presence (3.2%) of EU Hydro 2021 GOs among the traded volume after two consecutive months of absence.

EU Hydro volumes November 2022

AIB statistics are available until September 2022 (included) and are subject to adjustments.

EH Issuances and Cancellations November 2022

First, issuances were very low in 2022, when compared to 2021: as of the end of September 2022 issuances were 18.4% below 2021 levels (-17.7% at the end of August). The months of February and March particularly contributed to this drop in 2022. Furthermore, the latest figures from the AIB show quite low issuances in July and August 2022 when compared to 2021 levels.

Second, we had more EU Hydro GO canceled during these first nine months of 2022 compared to 2021: approximately 302 TWh against 292 in 2021 (+3.5%). This little gap can be explained by the fact that companies do not wait for March to cancel most of their GOs (because of the disclosure deadlines): they still do cancel a lot in March (97.8 TWh in 2022, 108.8 in 2021), but also in the two first months of the year. In 2022, 62 TWh were canceled in January and February (combined) versus also 62 in 2021. The month of September was quite high in cancelations this year: 7.8 TWh versus 6 in 2021. This figure might be slightly adjusted in the weeks/months to come, as well as the ones from August.

EH November 2022 Reservoir levels

Reservoir levels in Central Western Europe are quite close to normal levels, but below the historical average (not shown on the graph above). They currently are at 76.5% and in the Iberian Peninsula (Spain and Portugal), they show indications of improvement at 33.6%. There seems to be no clear and causal relationship between the European reservoir levels and the EU Hydro price. Nonetheless, the reservoir levels (current and forecasted) surely send a good or bad signal to the market.

Prices rose and trades above even the 800 Eurocents/MWh mark were witnessed during the last week of November, for the 2022 and 2023 vintage. We don't expect them to go below this 500 Eurocents/MWh in the close future, given the global energy context that is getting worse and worse and the underlying fundamentals that scare market participants (low reservoir levels with no clear recovery in the incoming weeks).

Should you have any questions or remarks, feel free to reach out to me at christos@greenfact.com

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