European 2014 Electricity Prices Decline as Coal Drops to Record

European power for next-year delivery fell to a record as European coal for 2014 reached an all-time low, reducing costs for generators that use the fuel.

German baseload power for year-ahead delivery, a European benchmark, declined as much as 1.4 percent to the lowest since Bloomberg started tracking front-year prices in September 2007. The French equivalent lost 1.2 percent. Coal for 2014 in the Amsterdam-Rotterdam-Antwerp area slid as much as 0.4 percent.

Power for around-the-clock delivery in Germany next year fell as much as 60 cents to 41.10 euros ($54.97) a megawatt- hour, according to broker data compiled by Bloomberg. In France, the year-ahead contract lost 55 cents to a record 44.40 euros. European 2014 coal prices dropped 40 cents to a record $98.20 a metric ton before recovering to $99.25, broker data show.

“For next week, we continue to be overall bearish,” Paolo Coghe, a Paris-based analyst at Societe Generale SA (GLE), said yesterday in an e-mailed note. “Prices are fundamentally weak, and it is becoming increasingly difficult to envision deviations from the current price path in the short term.”

The German 2014 clean-spark spread, a measure of the profit utilities get from selling electricity after accounting for the cost of gas and emissions permits, fell as much as 3.5 percent to minus 15.63 euros a megawatt-hour, according to data compiled by Bloomberg.

To contact the reporter on this story: Julia Mengewein in Frankfurt at jmengewein@bloomberg.net

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