Can you describe expected impacts – ongoing or future – on the Wholesale Electricity Market (e.g. prices, spots products, forward contracts, PPAs, exports‌) due to the fall of commodity prices and energy demand? What measures at company, national and European levels can be undertaken to reduce the negative effects?
RO
SE
TR
To face these issues companies may need to revaluate and delay investments, question automated trade (p. ex: algorithmic trade), and review its long-term obligations Seeing current development of the wholesale market main impact (after price fall) was volatility increase of the wholesale prices. Even before the crises we had high volatility but in current time volatility is at highest level. In terms of wholesale some small traders or producers can have financial difficulties in supporting price drop and can close their businesses. The significant reduction of consumption along with a significant drop of wholesale market prices result in a mark to market position that is often higher than the overall supplier margin. (Updated on 25 May) Due to a hydrological surplus, absence of winter temperatures and increased capacity of wind power, the electricity prices on the Nordic market is very low and it is difficult to see any significant impacts of the corona virus on the prices. Due to the impact of the COVID-19 pandemic and resulting lockdown measures, electricity demand dropped. On the other hand, hydropower electricity generation increased with the advantage of wet season. Consequently, market prices decreased. Electricity demand in March decreased by 0.2% compared to the same month of the previous year, while in April this decrease was 14.5%. On the other hand, the market clearing price (MCP) was not affected by this decrease. In the first half of 2019, MCP was at low levels due to high hydro production. The MCP, which showed an upward trend in the first months of 2020, remained below last year with the effect of COVID 19. While the average of the MCP in March fell by 4.3% compared to the previous year, this decrease was 3.2% in April 2020. MCP have reached their usual levels as of May 11 with the implementation of controlled social life. The biggest drop in supply was observed in natural gas power plants. The generation from natural gas power plants fell from 4,390 GWh to 2,486 GWh in March and 3,203 GWh to 1,513 GWh in April comparing the same months between 2019 and 2020. Electricity consumption on the weekend fell by 13% compared to the previous weekend due to curfew in 31 major cities on April 10. The effect of the COVID-19 on daily electricity demand was observed especially between 04.00 and 10.00 am. The daily average consumption curve was in a 5-week downward trend after the taken measures however curve has stabilized as of the second week of April. During the pandemic significant decrease in electricity generation from imported coal was observed in the days when the wind production was high. Zero prices were observed in the MCP, which was lower in the time frames when the low demand was met from renewable energy sources. The lowest level of daily average of MCP was as 26.54 TL / MWh (~ 3,5 Euros /MWh) on 12 April. Decreases in electricity demand and declines in electricity wholesale prices are expected in 2020 and 2021, but it is thought that rising oil prices may prevent this decline. After starting the pandemic of COVID 19, the market prices have been affected negatively due to decrease of energy demand. In this period in Turkey, especially in April and May 2020, the electricity consumption shrunk by approximately 20% compared to the same period of the last year. Therefore, this situation led to decrease of the market prices. However, with COVID-19 normalization process in Turkey all the business sectors started to run as they did in the past. Consequently, as the energy demand will increase, the market prices will be where they should be in the following period. In this period, regulatory authority monitored all components of market and did not require any special measure. To reduce negative effects, it is important to have flexible market structure on both supply and demand side. Moreover, implementation of market rules should be proceeded. (Updated on 25/06) 38