What were the striking figures on the electricity markets this month?
December began unusually quietly, with temperatures above the seasonal average. As a result, demand for electricity remained subdued for almost the entire month. However, as Christmas approached, a sudden cold spell led to a significant increase in consumption, which is particularly important in a country like Germany.
What are the possible reasons for this market behavior?
The drop in temperature at the end of December put the system to a real test. As Germany, like its neighbors France and the Nordic countries, is increasingly switching to electric heating, cold weather leads directly to an increase in electricity demand. At the same time, the timing was unfavorable: both PV and wind energy production were seasonally weak, which limited the supply of renewable energy just when consumption was rising sharply. This combination led to a shortage on the market and increased price volatility.
What do you expect for the next month?
Looking ahead to January, a prolonged cold spell is already leading to a decline in gas stocks. If temperatures fall further, the following developments could occur: Very high spot prices due to strong demand for heating and potentially extreme price spikes on the intraday continuous (IDC) markets, particularly during periods of low electricity generation from renewable energies.
