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German wind power increases as spot prices fall.

German and French baseload electricity prices for the day ahead fell by around 20% on Wednesday, as a cooling heatwave in Europe is expected to reduce demand. Meanwhile, increased wind power production in Germany will increase supply.

LSEG data show that the German baseload day-ahead contract fell 19.3% to 86.75 Euro per Megawatt Hour (MWh) at 1011 GMT.

The equivalent French contract, at 82.50 Euros/MWh, was 19.7% less expensive.

The benchmark European power price has exceeded 100 euros per Megawatt Hour (MWh) for the first since April, as a heatwave early in summer spreads across Europe and increases electricity demand.

Prices began to fall on Tuesday as the wind was predicted to increase and temperatures to drop. They then continued their decline on Wednesday.

According to LSEG, the average daily temperature for Germany is expected to fall by 6.3 degrees Celsius (43.34degF), compared to Wednesday. In France, it's forecast to drop 2.6 degrees.

In a recent note, LSEG analyst Guro Wyller stated that wind power generation is expected to increase day-to-day in Germany by 10 gigawatts. This is "well above normal for the time of year", she said.

On the demand front, German consumption is expected to fall by 450 MW on Thursday to 56.4 GW, while French demand will drop by 3.7 GW, to 47.5 GW.

Data compiled by revealed that 78% of France's nuclear power was operational, up from only 72% two days ago.

EDF has shut down the reactor No. 1, which is 1,300 MW, at Golfech Nuclear Power Plant in Southwest France. The EDF shut down the 1,300 MW reactor no. 1 on Sunday night due to the anticipated increase in temperature of the Garonne River during the heatwave. The other reactor of the plant was already off-line for maintenance.

The German baseload price for the year ahead was up 1.0% to 87.40 Euro/MWh. This increase was supported by the strength of other energy markets.

The benchmark contract on the European carbon markets increased by 2.3%, to 72.22 Euros per metric ton.

The European Commission proposed a climate target for 2040 on Wednesday that will for the first allow countries to use credits from developing nations as part of their emission goal.

(source: Reuters)