Market outlook

Electricity

With a high of EUR 89.04/MWh on 30 July and a low of EUR 82.70/MWh on 18 August, the Cal 2026 Base traded within a range of EUR 6.37/MWh during the third quarter. The product is currently trading in the middle of this range at EUR 85.85/MWh. Recently, it has been supported primarily by strong emissions trading against the backdrop of the expiring compliance deadline on 30 September. In addition, the budget crisis in France and the associated strikes in the French energy infrastructure are also having a supportive effect. Geopolitical risks also remain at the forefront.

The price reductions for the base for 2027 (minus EUR 4/MWh) and 2028 (minus EUR 8/MWh) relative to the front year reflect the expectation that price-dampening effects will predominate in the future. These result from a good supply situation thanks to renewable energies, improved infrastructure – especially with regard to storage – and readily available fuels such as gas, LNG and coal.

Gas

The ever-improving LNG infrastructure, coupled with long-term and diversified LNG contracts, is bearing fruit. Gas is no longer the energy source that reacts as sensitively to every geopolitical news item as it did in the past. Since the beginning of the quarter, THE 2026 has been trading in a range of around EUR 4/MWh and is currently trading at EUR 33.45/MWh. Even the current relatively low gas storage level of 77 per cent in Germany is hardly causing any nervousness in the market, even though some analysts are warning of empty gas storage facilities from the end of January onwards in a ‘cold winter’ scenario. The outlook is neutral.

Coal

The easing of tensions on the gas market was also a reason for price reductions on the coal market. Currently, the API 2 front year is trading just above USD 100/tonne, which corresponds to the annual low. The price momentum at the beginning of the year due to low renewable feed-ins is now lacking. In addition, stable alternatives to the missing Russian coal have been established. The outlook is slightly bearish.

Emissions certificates

Volatility in European Union Allowances (EUA certificates) continued in the third quarter: the December 25 product fluctuated between EUR 68 and EUR 78 per tonne and, as in the past, is difficult to price. A growing number of speculative market participants appear to be driving the price independently of fundamental influences. Their positions (long/short), which are published in the Commitment of Traders Report (CoT), are becoming an increasingly important indicator. The outlook here is neutral.

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