In the next month, we forecast carbon prices will remain level as the economy struggles and strong hydro output persists.
Low industrial power demand persists in October
Industrial output will remain weak in October, typified by falling metal prices. Energy demand from the industrial sector will remain subdued, as will residential demand with mild weather forecasted for the next four weeks. Low energy demand will supress EUA demand slightly.
Available nuclear capacity will keep EUA price at bay
Nuclear output has improved in September and available capacity allows for higher output if demand needs to be met due to lower renewable output in the coming weeks. French output has increased significantly with more reactors coming back online. Nuclear output will have limited impact on EUA demand overall, but a downside risk is present if output increases.
Fossil fuels will have limited impact on EUA demand in October
Gas prices rose in September due to maintenance work in the European supply chain, causing gas-to-coal switching, which has now been concluded. We forecast that gas prices will ease slightly in October, with high storage levels and a return to normal supply chain operations. Overall, fossil energies will have little to no differential impact on the carbon price.
Strong hydro output will continue this month
Hydro generation has been strong in Europe and we expect this to continue in October. Solar generation will weaken with the decreasing daylight hours, but this will be balanced by increasing wind generation. Overall, renewables will have a neutral impact on carbon price during the next month.
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The cut-off date of the data is 25 September 2023.
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