Page 28 - InterEnergo - Annual Report 2020
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Interenergo                       Business report                                                                      Interenergo                       Business report

            Summary of events in the                           and growth in solar energy production. Renewable                    Figure: Average monthly SPOT electricity prices on the wholesale market in EUR/MWh

            energy market in 2020           3                  energy production rose further to 43 percent of total
                                                               electricity production this quarter, while electricity
                                                               prices in wholesale markets fell by a drastic 52
            Electricity consumption in the EU-27 fell by       percent compared to the same quarter in 2019.
            approximately three percent in the first quarter of   The third quarter was marked by an economic
            2020. Despite the positive outlook at the beginning   recovery after the spring closure, which was also
            of the year, the emergence of coronavirus and      reflected in electricity consumption, which fell by
            measures to prevent the spread of the virus led    an average of three percent. The price of emission
            to a drop in economic activity. Warm winter and    coupons recovered and in September exceeded
            temperatures, which were 2.7 degrees Celsius above   EUR 30/t. This growth was followed by wholesale
            the average for this period, further contributed to   electricity prices, which also rose higher due
            the drop in electricity consumption. The average   to the low availability of nuclear power plants in
            price of  emission coupons fell by  eight percent   France. Due to seasonality, the share of renewables
            compared to Q4 in 2019. In the first quarter of 2020,   decreased slightly compared to the second quarter
            due to overcrowded storage facilities and lower    and amounted to 37 percent. Growth in electricity
            consumption, natural gas prices in Europe continued   demand  has  had  a  positive  effect  on  fossil  fuel
            their downward trend. Natural gas prices were also   production. At the same time, increased production of
            followed by coal prices on world markets, but lower   electricity from solar energy and a good hydrological
            prices did not help to increase production from these   picture contributed to satisfactory production of                 Hungary   Germany    Italy  Greece   France
            sources. The share of production from fossil fuels fell   hydropower in combination with the high price of
            from 38 percent to 33 percent, which is a record low.
                                                               emission coupons and limited even greater growth                    Source: Internal analysis.
            Electricity prices on the European wholesale market   in the production of energy from coal. Wholesale
            fell by almost a third in the first quarter compared   prices on the spot market reached the level of prices           Figure: Average monthly electricity consumption in MWh
            to the end of 2019. The reasons for the decline in   on forward markets with the economic recovery at
            prices can be attributed mainly to relatively warm   the end of the quarter.
            weather during this period and good conditions     The last quarter was marked by the second wave
            for electricity production from renewable energy   of the COVID-19 pandemic, which also had a strong
            sources. The share of electricity production from   impact on the electricity market. Electricity demand
            renewable energy sources reached 40 percent of     fell again, but this time less than during the first
            total electricity production.
                                                               wave. The price of emission coupons continued to
            The trend from the end of the first quarter continued   rise, mainly due to stronger commitments by EU
            in the second. Electricity consumption as a whole   members to reduce greenhouse gas emissions and
            fell by 11 percent compared to the same quarter in   a more active transition to green energy sources. At
            2019. The price of coupons in the spot market fell   the end of December, the price surpassed EUR 33/t
            further on average compared to the first quarter,   and ended the year at a record high. Until the end of
            but price and liquidity rose by the end of the quarter.   the year, energy prices followed the trend from the
            Coal production experienced a sharp decline, as    third quarter. Compared to the same quarter of 2019,
            it was pushed out of the energy mix by a more      wholesale electricity prices mostly achieved positive
            competitive gas due to lower demand for electricity   growth, and in some countries exceeded five percent.

                                                                                                                                      Region   Germany    Italy  Greece   France
                                                                                                                                   * The region represents the monthly average electricity consumption of the following countries: Hungary, Slovenia, Croatia, Serbia, Bosnia and Herzegovina,
                                                                                                                                   Montenegro, North Macedonia, Romania and Bulgaria.
                                                                                                                                   Source: Internal analysis.

              Source: Internal analysis based on data from quarterly EU Commission reports.

            26    Integrated Annual Report 2020                                                                                                                                                       Integrated Annual Report 2020  27
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