London — German prompt power prices plunged from their highest in over a year last week to very bearish levels due to a return of milder weather, with storms boosting wind power output to near record levels later this week, increasing risk of negative hourly prices overnight, a source said.

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On the curve, forward contracts shed most gains from Friday's rebound rally as the mild and windy weather was forecast to stretch into February with fuel and carbon prices also reversing Friday's rebound.

Baseload power for Tuesday delivery was last heard OTC at Eur25.25/MWh, almost Eur8 below where Monday power was assessed last Friday and almost Eur15 below the Tuesday contract was assessed a week earlier, Platts data show.

Tuesday peakload last traded OTC at Eur30.60/MWh, down almost Eur10 from Monday's price on Friday and more than Eur20 below Tuesday last week. Last week, day-ahead prices reached their highest level in over a year with Thursday base at Eur56/MWh and peakload at Eur75.50/MWh as a cold/low wind scenario across Europe coincided with a strike in France.



Epex Spot settled Tuesday below OTC as well as more than Eur4 below Monday at Eur25.51/MWh baseload and Eur30.30/MWh peakload.

Some hourly prices plunged almost 65% with evening peakload hour 18 settling Tuesday just above Eur32/MWh after the same hour spiked above Eur92/MWh last week.

Wind power output was forecast to build steadily from just 6 GW Monday lunchtime to reach 20 GW Tuesday evening with average baseload forecast to rise from 12 GW Monday to 19 GW Tuesday, a source said.

Wind will average above 25 GW Wednesday, possibly reaching peaks above 30 GW this weekend with a high chance of negative hourly price overnight, a source said.

Conventional plant availability from nuclear, coal and lignite was pegged at 43 GW for Tuesday, EEX transparency data showed.

"The steady wind profile [especially on Wednesday] and a risk of negative hourly prices [during off-peak 1] may see even lignite units ramping down," a source said.

Further out, week-ahead baseload was heard trading at Eur22.25/MWh, the lowest for such a contract since the Christmas holidays amid a continuation of the mild and windy weather scenario and falling generation costs also starting to filter through.

Year-ahead baseload was heard trading at Eur23.30/MWh, down 45 euro cent from Friday's close, but still marginally above last week's 14-year low, with EUA carbon allowances once more falling below Eur6/mt, a drop of almost 30% since the start of 2016 and wiping out Friday's rebound.