European power prices, according to the Platts Continental Power Index (CONTI)*, fell 13.29% to €33.08 per megawatt hour (MWh) in December compared to November, itself down 9.4% on October levels. On a year-over-year basis the index was down 14.5% in December.

Mild weather twinned with falling oil prices saw European gas prices fall further as well. The U.K. day-ahead natural gas price fell 3.9%, while Dutch TTF day-ahead gas fell nearly 8% on a month-over-month basis in December.

Platts’ regional analysis of European power and natural gas markets showed the following:

* Germany: day-ahead prices in December averaged €28.32/MWh, down 12% month over month as German wind output chalked up a new monthly record at 11.5 terawatt hours (TWh), up 30% from December 2014. Wind was Germany’s largest single source of electricity through December, forcing lignite-fired power plants into second place with 11.1 TWh. Total 2015 wind output is estimated at 86 TWh, up 50% from 2014.

* France: day-ahead prices fell 17% month over month to €35.05/MWh in December, and were down 14% year over year. Strong output gains in wind and solid nuclear availability served to balance sub-par hydro performance towards the end of the year, with key generator EDF on track to meet its 410 TWh nuclear output target for the year.

* U.K. power: average day-ahead prices in December were 8% down month over month and 21% down year over year as an unusually mild, wet and windy winter endured. Wind supplied 17% of U.K. electricity demand for the month, surpassing the previous record of 14% set in January, 2015. For the year, 11% of the U.K.’s electricity was generated by wind, up from 9.5% in 2014.

* U.K. natural gas: National Balancing Point (NBP) day-ahead gas prices fell 3.88% month over month to 34.18 pence/therm in December, and were down a hefty 36.50% on December 2014 levels of 53.83 pence/therm. Mild temperatures reduced household heating demand by nearly 25% year over year, in turn reducing the need for storage withdrawals to balance the system.

* Dutch gas: on the TTF, continental Europe’s most liquid natural gas trading hub, mild weather continued to drive losses, with the day-ahead gas contract falling to €13.95/MWh over the Christmas period — its lowest level since April 2010. Domestic gas demand fell 22% year over year to 3.1 Bcm, with greatly reduced domestic heating needs triggering a 28% fall in local distribution zone consumption.
"German power prices continued their downward trend in 2015, but a 4% decline was the smallest annual drop in the post-Fukushima-era as record power exports, plant closures and higher carbon prices helped to stem losses caused by the renewables boom," said Platts Managing Editor of European Power Andreas Franke.

A 4% year-on-year decline in spot price for full year 2015 to €31.65/MWh compared with a 12% decline in 2014, 13% in 2013 and 17% in 2012, from an average €51.69/MWh back in 2011.

On the curve, meanwhile, German year-ahead baseload power for 2016 delivery averaged just below €31/MWh in 2015 compared with €35.08/MWh in 2014, a drop of 12% following a 10% decline in 2014.

"Front-year coal into Europe dropped some 33% in price over the course of 2015, falling below $44/mt for the first time since Platts started assessing the contract in 2007," Franke said.

Front-year TTF gas, the benchmark contract for continental gas, shed 36% from its 2015 high in February and its year-low of €14.75/MWh recorded December 24. On average the daily closing price for front-year TTF gas was down 17% in 2015.

Platts Continental Europe and U.K. Day-Ahead Monthly Averages