A quick recap on what information you will receive along with the forecast and how to interpret it.
What information does the chart give you?
What information does the chart not give you?
Why doesn't the chart give an indication of the price (in €/MWh) of all forward products?
Why should we anticipate market movements?
How to interpret the detail labels of the chart?
How often are the analyses updated?
How are market analyses carried out?
Why trust ours market analysis?
Is the fixing advice based solely on market forecasts?
WHAT INFORMATION DOES THE CHART GIVE YOU?
1. Black curve: A curve of the evolution of prices of forward products until today
2. Green curve: The chart also gives you a constantly updated calendar of the likely upward and downward price movements on the wholesale market of all forward products (green curve). Forward products are products (CAL, Quarter, Month, etc) that will be delivered in the medium to long term.
The chart explains the scenario on which our forecasts are based, exposing the main events and their impact on the overall panorama in a given period of time.
Attention: The price indication in €/MWh given by the curves only concerns the product CAL+1. This product is used as a reference product to know when and how the prices of all other forward products will evolve. The upward and downward evolution of the prices of the forward products is closely correlated to that of the CAL+1 product even if their prices differ.
WHAT INFORMATION DOES THE CHART NOT GIVE YOU?
- Except for the CAL+1 product, the chart does not give you any indication of the price evolution of the products on the short-term market (products whose delivery starts this month, next month or the month after).
- It does not give you any indication of the price (in €/MWh) of the forward products (CAL, Quarter, Month, etc) but only of their upward and downward evolution.
WHY DOESN'T THE CHART GIVE AN INDICATION OF THE PRICE (IN €/MWh) OF ALL FORWARD PRODUCTS?
This application gives you advice on when to call your supplier as per the market opportunities.
Independent of the prices, the forecasts of the upward and downward movements of the market allow you to understand when it would be better to make a fixing. The information has the advantage of being common to all forward products (CAL, Quarter and Month) that will be delivered in the medium and long term.
Calculating the forecast prices of each forward product would require considerable effort and would cost you a lot, while not improving the optimisation of your contracts. The information would be more complex and would give you the false impression that you could calculate an accurate budget forecast without taking into account the margin of error of the forecasts.
WHY SHOULD WE ANTICIPATE MARKET MOVEMENTS ?
Managing the risk due to the high volatility of the prices in the energy sector requires constant monitoring, analysis, and anticipation of the market movements in order to seize an opportunity or to avoid a loss. It means acting on the basis of up-to-date objective data and the probability of occurrence of positive or negative events between now and the start of the product delivery.Market forecasts provide some answers to the question: When to price volumes that starts to be delivered in 3 months, 6 months or more than a year; If you wait, are the prices likely to get better or worse than at what you would get today?
Anticipating market movements allows you to :
- Make fixings if there is a high probability that prices will rise between now and the start of product delivery.
- Wait to make fixing if there is a high probability that prices will fall between now and the start of product delivery.
- Secure a market opportunity in case of alerts of Take-Profit or Attractive prices based on historical market analysis.
- Make safety fixings in case of Stop-Loss alerts when prices rise sharply and rapidly.
- Assess the volumes that could be conveniently fixed in the light of likely market developments.
HOW TO INTERPRET THE DETAIL LABELS OF THE CHART?
A. Detail labels on the historical data of the market (black curve)
Closing price CAL+1
If you place your cursor on the black curve you will see the closing price of the product CAL+1* at a given date.
*The CAL+1 product is a relative product. In 2021 it refers to 2022, in 2022 it refers to 2023, in 2023 it refers to 2024, etc.
B. Detail labels on the forecasted data of the market (coloured curve)
Average monthly price CAL+1
If you place your cursor on the 15th of an upcoming month, you will see the value of the average price in €/MWh of the product CAL+1* during that month according to the forecasts that have been modelled as the most likely with the data available to date.
*The CAL+1 product is a relative product. In 2021 it refers to 2022, in 2022 it refers to 2023, in 2023 it refers to 2024, etc.
Min. and max. values
The min. and max. values indicate the margin of uncertainty in the forecast. The margin of uncertainty is greater when:
- The forecasts concern prices that are expected to prevail in the very long term.
- There is high price volatility due to the affect of the external factors on market fundamentals (e.g. financial speculation).
- There are uncertainties surrounding the outcome of geopolitical or legal issues that could have adverse consequences on the level of supply and demand in the market.
Please note that the market forecasts, like weather forecasts, do not guarantee a 100% certainity but we ensure that our forecasts and analysis deal with the events in the best possible way.
HOW OFTEN ARE THE ANALYSES UPDATED ?
We check the consistency of the data every day with the new information that has appeared since the previous day. We update the prices of the CAL+1 (reference product) and the explanation of market movements each time the new information significantly impacts the market balance, resulting in the revision of the fixing allocation.
HOW ARE MARKET ANALYSES CARRIED OUT?
The historical and forecast market analysis is carried out by a team of economists, statisticians, and mathematicians specialized in the energy sector who have access to numerous databases and are constantly monitoring the ecosystem that produces gas and electricity prices. This team of experts analyses the reasons for the electricity market movements in the light of available information and closely monitors the evolution of variables (weather, gas prices, regulations, geopolitical situation, availability of production plants, CO2 prices, financial speculation, etc.) that will have an impact on electricity supply and demand levels in the coming months.
WHY TRUST OUR MARKET ANALYSIS?
Three times a year, we analyse the quality of the forecasts of the previous 4 months. You have direct access to these analyses in the application. In these analyses we explain what has actually happened in the market, what are the reasons for any discrepancies in our forecasts and what are the differences between what is predictable and what is not. We look at the extent to which the scenarios, that our forecasts are based on, have been borne out and whether we have correctly estimated their impact on the market movements. Despite such meticulousness in understanding the scenarios, sometimes the intensity or duration of the market movements tend to be under/over estimated. This is why we constantly monitor the markets to spot any unforeseen events as soon as possible and quickly adjust our forecasts.
IS THE FIXING ADVICE BASED SOLELY ON MARKET FORECASTS?
Our fixing advice is based on market forecasts, but also takes into account the conclusions drawn from historical market analysis, i.e. comparing today's prices with past prices.