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