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German 2013 Power at Record Low Deteriorates Generating Margins

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Nov. 22 (Bloomberg) -- German electricity for 2013 delivery fell to a record, pushing loss margins for gas-fired power plants to their widest in three weeks.

German baseload 2013 electricity, for supplies delivered around the clock, slid as much as 0.4 percent to 46.30 euros ($59.66) a megawatt-hour, according to broker data compiled by Bloomberg. That’s the lowest level for the contract since it started trading in May 2008. The contract was at 46.45 euros a megawatt-hour at 5:20 p.m. in Berlin.

The German clean-spark spread for next year, a measure of gas-fired power plant profitability, widened by as much as 1.4 percent to minus 12.51 euros a megawatt-hour, its lowest level since Oct. 31, according to data compiled by Bloomberg.

Germany may close as much as 14 gigawatts of aging fossil-fueled capacity by 2015 as utilities start paying for permits to emit carbon next year, Mark C. Lewis, an analyst at Deutsche Bank AG, said today. Profits at gas-fed power stations in Germany have been negative since the start of the year, which may influence companies’ decisions to close plants, he said.

German December power, a European benchmark contract, fell as much as 1.6 percent to 45.75 euros while the day-ahead contract dropped as much as 7 percent to 46.50 euros amid higher-than-expected wind output. Wind generation was at 3,484 megawatts at 5:04 p.m., compared with an earlier forecast for today of about 2,000 megawatts, according to the website of Meteologica SA, a Madrid-based weather bureau.

To contact the reporter on this story: Marek Strzelecki in Warsaw at mstrzelecki1@bloomberg.net

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

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