Home Europe & UK RWE hedges power prices up to 2022, CO2 costs into the mid-2020s
RWE hedges power prices up to 2022, CO2 costs into the mid-2020s

RWE hedges power prices up to 2022, CO2 costs into the mid-2020s

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The company also covered much of its carbon emissions rights requirements through accompanying financial hedges to protect itself against generation margin risks

FRANKFURT: German utility RWE, one of Europe’s biggest power generators, has sold much of its power output over the next few years, it said on Thursday.

* The company also covered much of its carbon emissions rights requirements through accompanying financial hedges to protect itself against generation margin risks.

* Wholesale traders and analysts use hedge rates to track earnings, to assess future volumes tied up with counterparties, and the value of forward production.

* More than 90% of German nuclear and brown coal production for 2019, 2020 and 2021 was sold ahead at 29 euros ($31.96), 32 euros and 42 euros per megawatt hour (MWh) respectively, RWE said in slides presented with its nine-months 2019 earnings.

* More than 80% of 2022 delivery was sold at 49 euros, the slides showed.

* RWE said the numbers did not factor in the impact from possible coal plant phase-outs in the wake of decisions by Germany to get out of coal by 2038, which are still subject to negotiations about compensation for operators.

* On carbon, RWE’s average hedged power price for 2019 and 2020 is expected to be equal to an average hedged price of around 5 euros per tonne, for 2021 of 11 euros, and for 2022 of 18 euros, it said.

* Eikon Refinitiv German baseload power of all generation types for delivery in 2020 closed at 45.3 euros/MWh in the European wholesale market on Wednesday, and 2021 closed at 46.9 euros.

* Baseload delivery contracts for 2022 and 2023 settled at 48.1 euros and 49.8 euros.

* Carbon emissions for December 2019 expiry closed at 24.29 euros/tonne.

* Sector peer Uniper gave some details of its hydropower hedging volumes at earnings earlier this week.

Source: energy.economictimes.indiatimes
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Anand Gupta Editor - EQ Int'l Media Network