欧州のガス・電力価格動向：2007年8月

Abstract

Introduction

The growing role of wholesale traded energy markets across Europe creates a greater need for players throughout the value chain to be aware of the latest market movements and developments. From the wellhead or power station gate to the end-user, volatility in the spot and forward price of power and gas is creating an increasingly challenging environment for all market participants.

Scope of this report

• An examination of the wholesale gas price trends in Europe' s three key markets - the UK NBP, the Zeebrugge Hub and the Dutch TTF.
• An assessment of traded power prices in the UK, Belgian, Dutch, German and French wholesale power markets.
• Insight and analysis into the impact of wholesale markets on the wholesale / retail price interface.

Research and analysis highlights

• Record oil prices are yet to impact upon the European gas market
• Dutch-German gas prices will become increasingly interlinked
• UK gas plant investment is an important structural hedge for RWE

Key reasons to read this report

• Establish the current level of wholesale and retail energy prices and the fundamental drivers behind movements in the traded value of gas and power
• Understand how wholesale pricing impacts different facets of the value chain, identifying the potential to limit risk through hedging strategies
• Forecast future developments in the traded price of gas and power in order to successfully take advantage of arbitrage opportunities

Table of Contents

• VIEW
  • CATALYST
  • SUMMARY
• ANALYSIS
  • Record oil prices are yet to impact upon the European gas market
    • European oil prices led the way to nominal record highs
    • The US still dominates buyer sentiment in the global oil market
    • Chinese demand growth will not outstrip vast US consumption
    • US inventories influence the value of crude on a global basis
    • Healthy oil inventories contrast with unseasonably low gasoline stocks
    • Healthy oil inventories contrast with unseasonably low gasoline stocks
    • US refineries are failing to meet summer ' driving season' demand
    • America is importing crude products to meet refinery shortfalls
    • America is importing crude products to meet refinery shortfalls
    • Key product markets influence the underlying value of crude oil
    • Global oil market dynamics impact upon Europe' s forward gas market
    • Oil will have a diminishing short-term impact on EU gas markets
    • Oil will have a diminishing short-term impact on EU gas markets
  • Gross retail margin impacts upon key EU energy markets differently
    • Despite high input costs, German gas prices show scope for significant margin
    • Tighter conditions in the UK make German comparison complex
    • Wholesale power costs and retail prices may appear attractive, but exclude high menu costs
    • The more transparent UK power market interface is difficult to assess accurately against an opaque German model
    • The UK' s liberalized market has delivered cheaper household bills
    • UK retail pricing is competitive in comparison to Europe, but there is still room for development
    • UK retail pricing is competitive in comparison to Europe, but there is still room for development
  • UK gas plant investment is an important structural hedge for RWE
    • Coal-fired plants are the UK' s foremost source of power generation
    • Coal-fired plants are the UK' s foremost source of power generation
    • RWE' s investment in UK gas plant is a sensible structural hedge
    • The UK offers the greatest opportunity for profitable fuel switching
    • RWE' s German heartland offers secure coal generation margins
    • RWE lacks the downstream Dutch presence to offset upstream risk
  • Dutch-German gas prices will become increasingly interlinked
    • German and Dutch gas markets show signs of price co-movement
    • German gas prices are linked to the TTF at the near end of the forward curve
    • The TTF market and EGT hub in northern Germany exhibits a stronger price correlation
    • Dutch-German mid-curve gas prices exhibit greater variance
    • Dutch-German mid-curve gas prices exhibit greater variance
    • Longer term, however, Dutch-German gas prices begin to re-align
    • Longer term, however, Dutch-German gas prices begin to re-align
  • Long-term UK domestic supply contracts are a viable route to market
    • Longer-term procurement offers greater surety in a bull gas market
    • UK regulatory changes will promote residential supply innovation
    • Seasonality plays a pivotal role in wholesale procurement strategy
    • Long-term domestic supply contracts are a viable route to market
  • NW European power prices took a sharp downturn in July 2007
    • Belgian power prices drift, but the forward outlook stays firm for Year-Ahead contracts
    • French baseload price movements illustrate short-term uncertainty
    • Germany followed the pan-European trend in baseload power as price instability returned
    • Dutch power prices were characterized by near end fluctuations
    • Baseload prices remain stable in the UK, despite flooding and severe weather in July 2007
  • NW European gas prices are bucking their recent downward trend
    • Bullish sentiment dominates the NBP as UK gas supply concerns fall back into the spotlight in July 2007
    • Stronger Dutch prices highlight the bullish sentiment of gas traders across Europe in the short term
    • Belgian gas prices firm at the far end of the curve
• APPENDIX
  • This brief builds upon Datamonitor' s extensive pricing proposition
  • Glossary
    • This brief contains a number of industry standard terms
  • Our analysis builds on other sources to provide greater insight
    • Further Reading
    • Extended Methodology
  • We assess the profitability of fossil fuel plants across northwest Europe
  • Our bespoke services can be tailored to your specific needs
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
  • List of Figures
    • Figure 1: America' s spot Western Texas Intermediate (WTI) crude and Europe' s spot Brent Blend crude markets are closely linked
    • Figure 2: Longer term, the US oil curve is stronger than its European peer, reflecting the strength of forward US demand fundamentals
    • Figure 3: Chinese oil demand growth will place an increasing burden on global crude production, but America' s dominance will persist
    • Figure 4: As the predominant consumer of crude and its derivative products, America' s stock position has a strong impact on global oil prices
    • Figure 5: US commercial crude oil inventories are at their highest level in almost a decade
    • Figure 6: Gasoline inventories are, however, at their lowest mid-summer position in recent years
    • Figure 7: US refinery utilization has been consistently near a four- year low throughout 2007
    • Figure 8: Healthy US crude stocks have limited imports into the world' s largest consuming market
    • Figure 9: By contrast, crude product imports are unseasonably high to bolster gasoline stocks
    • Figure 10: Key crude product markets (gasoline and heating oil) are driven by seasonal shifts in demand, underpinning oil prices year-round
    • Figure 11: Europe' s benchmark Brent oil price has a stronger relationship with longer-term gas prices, which lack other fundamental certainties
    • Figure 12: Oil' s influence on gas is traditionally stronger during the lower demand summer period
    • Figure 13: The 2007 crude spike has dented the oil-gas price correlation for both summer and winter
    • Figure 14: High costs for procuring forward gas contracts are not hindering opportunities to make margins at the retail end in Germany
    • Figure 15: The volatility and instability of prices in 2005/06 has subsided, paving the way for new opportunities for retail suppliers in the UK
    • Figure 16: Despite Germany' s retail domestic price being one of the highest in Europe, a gross margin is consistently present
    • Figure 17: The picture looks bright for power suppliers but it is too early to benchmark competition in Europe
    • Figure 18: German versus UK retail domestic bills comparison
    • Figure 19: UK end users enjoy the cheapest gas prices of western Europe' s major economies
    • Figure 20: UK retail power prices are yet to reflect the full impact of wholesale market downturn
    • Figure 21: Coal has overtaken natural gas as the predominant source of UK power generation
    • Figure 22: Power generator demand for profitable coal has grown rapidly year-on-year since 2005
    • Figure 23: Coal delivers consistently higher margins than gas across NW Europe to 2010
    • Figure 24: While coal plant continues to deliver the greater profitability, strong seasonality in UK gas pricing offers fuel switching opportunities
    • Figure 25: RWE' s vast German coal-fired fleet will theoretically deliver consistent gross generation margins of over €10/MWh to 2010
    • Figure 26: The import-dependent Dutch power market offers the strongest average gross generation margins for both coal and gas to 2010
    • Figure 27: The geographic proximity of the Dutch TTF and the German BEB & EGT gas markets creates price symmetry
    • Figure 28: Quarter-Ahead prices illustrate a relationship between the TTF market and the BEB gas hub
    • Figure 29: The TTF market and the EGT hub in northern Germany exhibit a stronger price correlation
    • Figure 30: Forward quarterly prices show a weaker relationship between the TTF and the EGT
    • Figure 31: Surprisingly, BEB forward quarterly prices shows little or no correlation with the TTF
    • Figure 32: The EGT shows some positive clustering using the 2010 Year-Ahead contract
    • Figure 33: The BEB hub appears to be roughly in line with EGT, although arguably more dispersed
    • Figure 34: Year-Ahead purchases delivered positive gross retail margins throughout the bull-run
    • Figure 35: Weighting wholesales energy costs by seasonal changes in demand creates a cost-reflective picture of theoretical gross margin
    • Figure 36: Forward volume-weighted wholesale costs are currently lower when buying Year-Ahead
    • Figure 37: NW European power prices took a sharp downturn in July 2007
    • Figure 38: Year-Ahead prices continue to stay strong but at the near end of the curve quarterly and Month-Ahead contracts diverge sharply
    • Figure 39: French Year-Ahead contracts took on a more bearish tone this month, while quarterly and monthly prices turned abruptly
    • Figure 40: In contrast to June, German prices flipped, with quarterly contracts rising, annual falling and Month-Ahead down-turning sharply
    • Figure 41: Dutch baseload prices mirrored the major European markets as they closely tracked the European trend
    • Figure 42: UK baseload remains stable and strong as outages, flooding and seasonally low temperatures left power markets largely unaffected
    • Figure 43: NW European gas prices are bucking their recent downward trend
    • Figure 44: The UK' s short-term supply concerns were again the center of attention, but at the far end the outlook remains stable
    • Figure 45: Bullishness dominated TTF prices, particularly on the near end of European trading, and quarterly contracts were hit hardest
    • Figure 46: Zeebrugge matches bullish sentiment as the movement to Q4 2007 reminded traders of the onset of winter - lifting quarterly prices
    • Figure 47: Energy pricing proposition
    • Figure 48: Generation spread methodology