German 2011 Power Falls From Eight-Month High as Gas, Coal Prices Decline

German electricity for delivery next year fell from its highest close in almost eight months as commodity prices tracked weaker stock markets and reduced generation costs at plants burning fossil fuels.

Baseload power for 2011 in Europe’s biggest market slid 1.30 euros, or 2.4 percent, to 53.80 euros ($66.04) a megawatt- hour, according to broker data compiled by Bloomberg as of 5 p.m. Berlin time. Baseload is delivered around the clock.

European equities fell after gaining for nine days. Energy traders monitor stock markets for an indication of a country’s economic performance and energy demand. German next-year power, a European benchmark, yesterday rose 1 percent to 55.10 euros, its highest close since Oct. 23.

“We’re seeing some weakness today, but the biggest picture points toward an upward trend,” Sebastien Terryn, a risk manager at Summit Energy Services Inc. in Waregem, Belgium, said today by e-mail. “It all depends on how natural gas prices will evolve as we move into the European summer period.”

Winter U.K. natural gas, for delivery from October through March, fell as much as 3 percent to 523.85 pence a therm. Coal for 2011 delivery to Amsterdam, Rotterdam or Antwerp lost as much as 3 percent to $99.50 a metric ton. Germany generates about a fifth of its power by burning coal. The country also gets electricity from nuclear, wind and solar plants.

German next-year power traded as high as 55.50 euros on May 10, the highest price since October. Bloomberg tracks power prices from brokers including GFI Group Inc., ICAP Plc and Spectron Group Ltd.

To contact the reporter on this story: Lars Paulsson in London at lpaulsson@bloomberg.net

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