Prices rise on EDF bidding incident, colder weather

British and Dutch wholesale gas prices rose on Monday morning as a bidding error by French power group EDF (EDF.PA) tightened the French power market amid cold weather and low wind speeds.

The Dutch benchmark contract for January (TRNLTTFMc1) was up 3.00 euros at 140.00 euros per megawatt hour (MWh) by 0956 GMT, Refinitiv Eikon data showed. The contract for the day-ahead delivery (TRNLTTFD1) rose by 7.65 euros at 140.50 euros/MWh.

The British contract for immediate delivery (TRGBNBPWKD) was 31 pence higher at 355.00 pence per therm while the day-ahead contract (TRGBNBPD1) rose by 28.00 pence to 355.00 p/therm.

Nuclear operator EDF (EDF.PA) said in an online note that the company accidentally old 1.5 gigawatts (GW) of excess power on the day-ahead market on Sunday, requiring the company to buy back electricity contracts on the intraday market on Monday.

If EDF bought the highs of the intraday market today, there would be a premium of around 100 euros ($105.53) per MWh versus the day-ahead price yesterday, said Emeric de Vigan, vice president of power at data and analytics firm Kpler.

That equates to roughly a 150,000 euros premium for the amount of power sold.

Meanwhile, wind speeds remain low and European temperatures for the coming days have been revised colder over the next 10-15 days, with temperatures are expected to fall slightly below normal over most of Europe and to become much colder in Britain at 4-7 degrees Celsius below normal levels, Refinitiv meteorologist Marcin Gorski said.

Refinitiv analyst Yuriy Onyshkiv said British prices are expected to rise later this week and next week due to a higher demand forecast, which is likely to be met with ample LNG supply, recently the highest compared with the same period in the previous three years.

The UK system was over-supplied by nearly 13 million cubic metres (mcm), National Grid data showed.

Peak wind generation was expected at around 8.3 GW on Monday and 9.3 GW on Tuesday, out of a total metered capacity of more than 22 GW, Elexon data showed.

In the European carbon market, the benchmark contract (CFI2Zc1) fell by 0.95 euro to 78.23 euros a tonne.