POWER: German DA Flips to Discount to France as Residual Load Drops
Feb-18 11:58
German day-ahead prices shifted to a discount compared to France due to increased wind generation and higher load factors, which reduced Germany’s residual load. Meanwhile, weaker wind in France limited losses from lower power consumption and stable nuclear availability.
- The German day-ahead spot settled at €110.83/MWh from €132.45/MWh on the previous day.
- The French day-ahead spot cleared at €117.31/MWh from €130.18/MWh on the previous day.
- Germany was at a €6.48/MWh discount from a €2.27/MWh premium in the previous session.
- Wind output in Germany is forecast to rise to 19.57GW, or 30% load factor during base load on Wednesday, up from 9.58GW on Tuesday, according to SpotRenewables.
- Wind output in Germany will then be at 21.16GW, or 33% load factor on 20 February (Thur) – which could see prices fall again.
- Power demand in Germany is forecast to be broadly stable on the day at 63.3GGW on Wednesday amid mean temperatures in Dusseldorf forecasts to rise to 1.4C on Wednesday from -0.6C on Tuesday and below the seasonal average of 4.3C, according to Bloomberg.
- Power demand will then also be 63.3GW on 20 February.
- Residual load in Germany is forecast to fall to 34.68GWh/h on Wednesday from 47.24GWh/h on Tuesday according to Reuters.
- In contrast, Wind output in France is forecast to decline to 5.53GW, or 23% load factor during base load on Wednesday from 6.17GW on Wednesday according to SpotRenewables.
- Wind will then be at a 29% load factor, or 6.91GW on 20 February.
- Power demand in France is forecast to decline to 64.85GW on Wednesday, down from 66.49GW on Tuesday as mean temperatures in Paris are forecast to rise to 6.1C on Wednesday, from 3.4C on Tuesday and above the seasonal average of 5.5C, according to Bloomberg.
- Power demand will then be at 61.94GW on 20 February.
- Nuclear availability in France was stable at 80% of capacity as of Tuesday morning, RTE data showed, cited by Bloomberg.
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Large SOFR & Treasury put flow reported Friday after leaning toward upside calls overnight (note late Thursday evening buy of 20k Feb 10Y 108.75 calls - expire next Friday). Over 60,000 TYG5 108.5 puts bought on the day, Mar'25 30Y put spread buying. Underlying futures reversed early highs, partially data driven. Projected rate cuts through mid-2025 cooling again, current lvls vs. Friday morning* as follows: Jan'25 at -0.1bp, Mar'25 at -7.5bp (-8bp), May'25 -12.9bp (-14.6bp), Jun'25 -22.3bp (-24.6bp), Jul'25 at -26.1bp (-29.1bp).
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- +10,000 SFRZ5 96.00/96.50/97.00 call trees 3.5 ref 96.05
- +3,000 SFRM5 95.68/95.81 put spds vs 0QM5 95.81/95.93 put spds, 0.0
- +8,000 SFRH5 95.62/95.68 3x2 put spds 0.5 ref 95.785
- +4,000 SFRG5 95.62/95.68/95.75 put trees 1.5 ref 95.785
- +4,000 SFRK5 95.62/95.75 2x1 put spds, 1.0 ref 95.925
- +10,000 SFRZ5 96.00/96.50/97.00 call trees, 3.5 ref 96.05
- 2,000 3QH5 95.37/95.50/95.62/95.75 put condors ref 95.92
- 2,000 SFRZ5 95.12/95.75 put spds ref 96.05
- 2,000 SFRZ5 95.43/95.68 put spds ref 96.05
- 5,500 SFRH5/SFRU5 95.75/96.00 call spd spds
- 4,500 SFRJ5 95.75 puts ref 95.92
- Block, 6,000 2QH5 96.00/96.12 call spds 5.5 ref 95.995
- 3,000 SFRM55 96.00/96.12 call spds
- 2,600 SFRH5 95.75/95.87 call spds vs. SFRM5 95.87/96.00 call spds
- Treasury Options:
- 3,000 TYG5 110.25/111.5 1x2 call spds, ref 108-18
- 2,475 USH5 120 calls, 9 ref 113-00
- +12,000 TYH5 105/113 2x1 strangles, 15
- 11,900 TYG5 106/107 put spds
- 30,000 TYG5 108.5 puts, 21 vs. 108-18.5/0.47% (total volume over 60,000)
- 1,300 TYG5 107.5/108/108.5 put flys, ref 108-18
- 4,000 USH5 119/121/123/127 broken call condors ref 113-10
- 11,500 TYG5 108.5 puts, 14
- 15,000 USH5 106/108 put spds (open interest 30,19 and 19,346 respectively)
- 4,000 FVH5 106 puts, ref 106-08.25
- 7,000 TYH5 109.5/110.5 call spds
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