What were the notable figures in the electricity markets this month?
December began unusually quietly, with temperatures above the seasonal average. As a result, electricity demand remained subdued for most of the month. As Christmas approached, however, a sudden cold snap led to a significant increase in consumption, which is particularly significant in a country like Germany.
What are some possible reasons for this market behavior?
The drop in temperature at the end of December put the system through a real test. As Germany, along with its neighbors France and the Nordic countries, is increasingly switching to electric heating, cold weather leads directly to a rise in electricity demand. At the same time, the timing was unfavorable: Both solar and wind power generation were seasonally low, which limited the supply of renewable energy just as consumption was rising sharply. This combination led to a shortage in the market and increased price volatility.
What are your expectations for next month?
Looking ahead to January, a persistent cold snap is already leading to a decline in gas reserves. Should temperatures continue to drop, the following developments could occur: very high spot prices due to strong heating demand and possibly extreme price spikes on the Intraday Continuous (IDC) markets, particularly during periods of low electricity generation from renewable energy sources.
