German 2014 Power Rises From Record Low as Carbon Permits Climb

German electricity for delivery in 2014 advanced for the first time in eight days as European carbon permit prices rose. February power in France and Germany declined to a record.

Baseload German 2014 electricity, for supplies delivered around the clock, adding as much as 0.6 percent after earlier declining to a record while carbon permits gained as much as 5.1 percent. Power can track fuel and emissions prices, which affect the cost of production at plants that burn fossil fuels.

The power contract rose as much as 25 cents to 44 euros ($58.74) a megawatt-hour and was at 43.90 euros at 5:12 p.m. in Berlin, according to broker data compiled by Bloomberg. EU carbon permits for December added as much as 30 cents to 6.20 euros a metric ton on the ICE Futures Europe exchange in London.

Price swings in the benchmark next-year German contract, as measured by 30-day historical volatility, rose to 10.971, the highest since Aug. 1, according to broker data on Bloomberg.

“There has been a pick-up in implied volatility on the annual contracts, after a long period of weakness,” Guy Wolf, a strategist at London-based commodities broker Marex Spectron Group Ltd, said in an e-mailed report. “We expect 2013 to be the year in which volatility returns to financial markets.”

French 2014 power lost 0.1 percent to a record 46.35 euros a megawatt-hour, broker data show.

Baseload February electricity in France and Germany, Europe’s two biggest power users, dropped to records. The German contract fell as much as 2.1 percent to 47.50 euros, a record since the contract began trading in October. The equivalent French contract lost as much as 1.9 percent to 53.95 euros, the lowest since it started trading in November.

To contact the reporter on this story: Rachel Morison in London at rmorison@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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