Dutch gas-fired power plant spot profitability fell July for the first time this year, according to Platts data.
For a plant with a standard 50% efficiency, the clean day-ahead spark spread -- a measure of the profitability of gas-fired generation taking into account fuel and carbon costs -- delivered at Eur0.60/MWh.
The day-ahead spark had delivered at Eur2/MWh in June, the first positive outturn in 2014. Dutch gas plant profitability had been improving steadily since the turn of the year, driven by plunging gas prices on the mild 2013-14 winter and the resulting large storage overhang into this summer.
The July spark spread outturn was squeezed by power prices, weighed down by robust system fundamentals made more comfortable by the start-up of GDF Suez's 731 MW Rotterdam 1 coal/biomass-fired plant early in July.
This was combined with bullish spot gas price sentiment in the second half of July on resurgent Russian flow concerns after the downing of a Malaysian airplane in eastern Ukraine.
Dutch day-ahead power prices averaged Eur34.63/MWh in July, which was 7% down on June's average and 27% lower than its outturn for July 2013.
The corresponding TTF gas price averaged Eur16.44/MWh in July, which was 5% down on June and 37% lower on the year.
July's day-ahead clean spark outturn was only slightly lower than that predicted by the month-ahead July clean spark spread expiry of Eur0.79/MWh.
Forward markets predicted spot sparks would push back into negative territory for August. On the last day of trading, the month-ahead August clean spark spread expired at minus Eur0.70/MWh, with Ukraine concerns driving the decline.
