[Report] European Gas & Power Price Market Research, Trends, Analysis TOC

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

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

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