Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Xetra  >  E.ON    EOAN   DE000ENAG999

E.ON (EOAN)
My previous session
Most popular
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector newsTweetsMarketScreener Strategies

E.ON SE : Europe's storms send power prices plummeting to negative

share with twitter share with LinkedIn share with facebook
share via e-mail
0
01/09/2014 | 03:01pm CET
Workers renew power lines at a electric electric power transformation substation near the western city of Betzdorf

LONDON/FRANKFURT (Reuters) - North Europe's devastating storms sent wind turbines spinning and helped strengthen a new winter phenomenon for the region - negative electricity prices.

Damaging for utilities losing money making electricity, delighting traders who cash in on price swings, they will not, however, mean cheap power for households.

A raft of elements to subsidise the green energy boom make up half of most consumer power bills, shielding them from immediate wholesale market price swings.

Over the Christmas holiday, which typically causes a drop in energy demand, wholesale electricity prices in Germany, the Nordic region, the Czech Republic and Slovakia turned negative on excessive renewable energy production and mild weather.

Wind and rain bring out the best in renewable energy from turbines and hydro power, a major source of Nordic electricity. Calm weather hampers green energy output.

Meteorologists say mild and wet weather could continue until March.

When renewable energy output is higher than necessary, as in stormy weather, producers face negative market prices because electricity cannot be stored in high volumes.

"I think negative prices will become more common with more wind farms being built. With more wind farms the chances of having supply outstripping demand are higher and this is the cause of the negative prices," said one European power trader.

Power producers with a diverse plant portfolio are able to lower output from other stations such as gas-fired plants to alleviate the impact of high renewable energy production.

"Utilities will learn from (negative prices) and will maximise their flexibility options so they don't lose money," a central European power trader said.

Utilities in Germany, including RWE (>> RWE AG) and E.ON (>> E.ON SE), EnBW <EBKG.DE> and Vattenfall <VATN.UL>, are able to deal with short-term swings in power prices, but they have been hit hard by the overall drop in wholesale prices due to renewable energy growth.

GERMAN INFLUENCE

In Germany, Europe's largest renewable power producer, negative prices have appeared more often in recent years, mainly because its renewable energy law requires that green power must be given priority on the network even when supply outstrips demand.

German wind power output in December was the second-highest monthly generation figure ever, statistics from Muenster-based renewable energy research institute IWR showed.

Berlin's strategy is to build many more renewable energy projects to help wean it off nuclear plants, some of which it shut down following Japan's Fukushima disaster.

Renewable power capacity and output has also grown elsewhere, especially in northern Europe, as governments support green energy growth through generous subsidy regimes in a bid to lower carbon emissions.

Germany's role as a benchmark electricity market in the region and its growing power links to neighbouring markets mean its price fluctuations are echoed in surrounding countries, as markets move increasingly in tandem.

On December 24, 2013, when industrial and business power demand dropped sharply, the price of German power for intra-day delivery fell to an average of -35.45 euros per megawatt-hour (MWh) between 0000 and 0600 in the morning, touching lows of -62.03/MWh halfway through that period.

German power traders said prices fell this low due to huge wind power production, at times exceeding 20 gigawatts or two thirds of capacity, that was coupled with mild weather.

Small changes in temperature levels can cause sharp swings in energy demand while dangerous wind speeds have no additional benefit. Wind turbines have an automatic break which is triggered when speeds become too strong and pose a threat to the blades' safety.

In Denmark and Sweden, strong winds also caused negative prices on Christmas Eve, with contracts in western Demark falling to -6.28 euros/MWh as wind farms generated near full capacity.

The Elbas intraday market for the Nordic, German and Estonian markets offered by the Nordpool Spot exchange saw the average price drop to a low of -30 euros/MWh during one hour on December 25.

(Additional reporting by Michael Kahn in Prague, Oleg Vukmanovic in London and Nerijus Adomaitis in Oslo, editing by William Hardy)

By Karolin Schaps and Vera Eckert

Stocks treated in this article : RWE AG, E.ON SE
Stocks mentioned in the article
ChangeLast1st jan.
E.ON 1.52% 9.131 Delayed Quote.0.77%
RWE 3.47% 19.08 Delayed Quote.12.24%
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on E.ON
11/16E.ON to Build 475-Megawatt Wind Farm in Sweden
DJ
11/16E ON : to build one of Europe’s largest onshore wind farms in Sweden
PU
11/14RWE sees no negative fallout should SSE-Innogy talks collapse - CFO
RE
11/14E.ON Plans to Unload Innogy's UK Business, Denies Further Job Cuts
DJ
11/14E.ON 9-Months Adjusted Net Income Grew; Narrows 2018 Guidance
DJ
11/14E ON : increases nine-month earnings and narrows forecast range
PU
11/14E.ON SE : E.ON increases nine-month earnings and narrows forecast range
EQ
11/14RWE Nine-Month Adjusted Net Income Falls
DJ
11/13Innogy cuts renewables, retail outlooks ahead of breakup
RE
11/12Gazprom says Swiss court blocks Nord Stream payments
RE
More news
News from SeekingAlpha
11/14E.ON SE 2018 Q3 - Results - Earnings Call Slides 
11/14E.ON SE (ENAKF) Management on Q3 2018 Results - Earnings Call Transcript 
11/14E.ON SE reports Q3 results 
08/12E.ON SE 2018 Q2 - Results - Earnings Call Slides 
08/12E.ON SE (ENAKF) Q2 2018 Results - Earnings Call Transcript 
Financials (€)
Sales 2018 36 434 M
EBIT 2018 3 025 M
Net income 2018 1 444 M
Debt 2018 12 002 M
Yield 2018 4,74%
P/E ratio 2018 13,64
P/E ratio 2019 13,51
EV / Sales 2018 0,88x
EV / Sales 2019 0,90x
Capitalization 20 098 M
Chart E.ON
Duration : Period :
E.ON Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends E.ON
Short TermMid-TermLong Term
TrendsBullishNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 10,5 €
Spread / Average Target 16%
EPS Revisions
Managers
NameTitle
Johannes Teyssen Chairman-Management Board & CEO
Karl-Ludwig Kley Chairman-Supervisory Board
Karsten Wildberger Chief Operating Officer-Commercial
Marc Spieker Chief Financial Officer
Ulrich Lehner Deputy Chairman-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
E.ON0.77%22 948
ELECTRICITÉ DE FRANCE44.00%51 574
NATIONAL GRID PLC-5.95%35 882
ENGIE-14.89%33 923
SEMPRA ENERGY3.80%31 435
ORSTED33.16%29 005