Gas Prices Rise While Carbon Prices Decline

Last week, Dutch power prices averaged €114.6/MWh, an increase of €11.1/MWh week-on-week. Baseload prices cleared above €100/MWh on all days, peaking on Monday at €139.0/MWh and reaching a weekly low on Thursday at €102.4/MWh. On an hourly basis, prices exceeded €200/MWh during evening hours on Monday and Tuesday.

The bullish price movement was primarily driven by a sharp decline in wind generation, particularly in Germany, where output fell by approximately 15%. Wind generation in the Netherlands remained broadly comparable to previous week, although output was weaker during the first half compared to the latter half. In addition, temperatures dropped by around 4°C, averaging close to 2°C across the Netherlands, Germany, and France, which increased heating demand.

Gas prices averaged €37.8/MWh, up €5.2/MWh week-on-week, marking one of the steepest weekly increases in recent periods. The rally was supported by colder weather forecasts across Europe, reduced renewable generation, and stronger storage withdrawal rates, all of which lifted prompt demand. Market sentiment was further underpinned by geopolitical uncertainty, particularly related to US–Europe trade tensions and announcements from the Trump administration at the Davos forum.