Monthly Price Brief - A Review of European Gas and Power Price Trends: July 2007

Content

• Datamonitor View
• Catalyst
• Summary
• Analysis
  • Electrabel's New Plant Build Program Is Set To Bear Fruit
  • Electrabel New Plant Builds Are Astutely Spread Across Nw Europe
  • Gas Plant Offers A Strong Seasonal Hedge In Electrabel's Heartland
  • Electrabel's Investment In Dutch Generation Capacity Is Prudent
  • Weaker German Generation Spreads Still Point Toward Coal Builds
  • Hydro Stock Builds Will Play A Secondary Role In Carbon Price Dynamics
  • Western Europe's Hydro Outlook Has Notably Improved In 2007
  • Recovering Spanish Reserves Offer Downside To Carbon Prices
  • Eu Policy Makers Will Continue To Drive Carbon Market Sentiment
  • The Uk And Spain Will Lock Horns With The Us For Atlantic Lng
  • Rising Lng Usage Will Inevitably Converge Uk And Us Gas Prices
  • Spain Still Has A Significant Role To Play In The Atlantic Lng Market
  • French New Entrants Face Uphill Struggle To Break Edf's Stranglehold
  • Eu Investigates Regulated French Tariffs As A Barrier To Competition
  • Poweo Mounts Customer Acquisition Challenge As Market Opens
  • Poweo Faces An Uphill Struggle To Break French Customer Loyalty
  • French Industry Enjoys An Energy Price Advantage Over Its Peers
  • French Industrial Supply Offers Little Or No Margin To New Entrants
  • European Gas Storage Outlook Is Extremely Positive Ahead Of The Winter
  • Uk Storage Injections Are Significantly Ahead Of The Game
  • French Stocks Appear Healthy In The Event Of A Tight Uk Winter
  • Northwest European Wholesale Power Prices Continue To Plateau
  • Belgian Prices Remain Strong, Despite A Drop In Quarterly Contracts
  • Short And Longer-Term French Baseload Price Trends Diverge
  • German Near Curve Prices Decline As Heat Wave Fails To Materialize
  • Dutch Power Prices Characteristically Track The German Market
  • Uk Power Traders Indifferent To Severe Weather Warnings
  • Europe's Key Wholesale Gas Markets Gripped By Summer Lull
  • Bearishness Returns To The Nbp After Supply-Side Woes Subside
  • Dutch Gas Prices Mirror Bearishness Sentiment At The Nbp
  • Belgian Gas Prices Mirror Movements At The Influential Nbp Market
• 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: Electrabel's Upstream Investments Are Sensibly Hedged To Secure Generation Margin Across Varying Markets And Different Fuel Types
  • Figure 2: Belgian Coal Plants Will Ultimately Deliver More Profitability Than Gas Generation In Electrabel's Incumbent Power Market
  • Figure 3: While Coal-Fired Plants Prove The Most Profitable Generation Type In The Netherlands, Gas Also Delivers Positive Margins Out To 2010
  • Figure 4: German Generation Margins Are Lower Than In The Benelux Markets, But Dark Spreads Maintain Relative Attractiveness Over Gas
  • Figure 5: Western Europe's Key Hydro Stocks Have All Notably Improved On Their H1 2006 Position
  • Figure 6: French And Nordic Reservoir Levels Follow A Distinct Pattern, While Spanish Hydro Stocks Continue To Recover From Draught Conditions
  • Figure 7: National Allocation Plans Exert A Far Stronger Influence On The Value Of Carbon Compared To Short-Term Fundamentals Such As Weather
  • Figure 8: Market Fundamentals Continue To Drive Sentiment During The Peak Demand Winter Period, But Summer Price Convergence Is Likely
  • Figure 9: Although Long-Term Bookings Dominate Spanish Lng Allocations, Significant Terminal Capacity Is Available For 'Spot' Cargoes
  • Figure 10: In France, The Propensity To Switch Power Supplier In Both Industry And Households Is Among The Lowest In Europe
  • Figure 11: Liberalized Power Markets Have Seen Retail Prices Climb Above Regulated Tariffs As Rising Commodity Prices Are Fully Passed Through
  • Figure 12: Gross Margin Is Non-Existent For Entrants Securing Forward Power In France, Before Additional Delivery Costs Are Even Considered
  • Figure 13: With 2005/06 Injection Trends Implying Rough Will Be Full By Aug-07, It Will Only Remain For The Uk's Medium-Sized Facilities To Be Filled
  • Figure 14: Excess Stored Gas In The Import-Dependent French Market Could Be Exported Via The Interconnector In The Event Of A Cold Uk Winter
  • Figure 15: Northwest European Wholesale Power Prices Continue To Plateau
  • Figure 16: Belgian Annual And Monthly Forward Baseload Power Prices Held Firm In June 07, While The Quarterly Contract Begins To Slip Back
  • Figure 17: French Near Curve Power Prices Come Under Downward Pressure From Mild Seasonal Fundamentals, But The Far Curve Remains Bullish
  • Figure 18: Quarter Ahead German Baseload Contracts Witnessed A Steep Decline As Trader Expectations Of A Summer Heat Wave Subsided
  • Figure 19: The Dutch Power Market Mirrored Neighboring German Prices, Witnessing Losses In The Month Ahead And Year Ahead Contracts
  • Figure 20: Uk Near And Far Power Curve Trends Diverged Only Marginally In Jun-07, As Severe Flooding Failed To Significantly Impact Market Sentiment
  • Figure 21: Nw Europe Gas Markets Reversed Recent Gains Across The Board
  • Figure 22: Uk Wholesale Gas Prices Returned To Their Underlying Downward Trend In June 2007 After Unplanned North Sea Outage Fears Dispersed
  • Figure 23: The Ttf Gas Market Slipped Downwards As Both The Prompt And Far Curve Retraced The Bullishness Seen In May 2007
  • Figure 24: The Bacton-Zeebrugge Interconnector Ensures Strong Price Linkage Between The Eu's Largest Wholesale Gas Market And Belgium
  • Figure 25: Energy Pricing Proposition
  • Figure 26: Generation Spread Methodology