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E.ON shows forward sales of German nuclear output below market prices
November 8, 2017 / 7:59 AM / in a month

E.ON shows forward sales of German nuclear output below market prices

FRANKFURT, Nov 8 (Reuters) - German utility E.ON hedged forward 94 percent of nuclear power production in 2018 and 62 percent of output in 2019 at its PreussenElektra subsidiary below current prices, slides released for analysts’ and press calls on Wednesday showed.

* The 2018 output sold at 27 euros ($31.32) a megawatt hour (MWh) and that in 2019 also at 28 euros.

* By comparison, Thomson Reuters wholesale market prices for German baseload electricity to be delivered in 2018 were at 37.1 euros/MWh and at 35.8 euros/MWh for 2019 at the Tuesday wholesale market close, according to Thomson Reuters data.

* E.ON operates three nuclear power stations in Germany, Brokdorf, Isar 2 and Grohnde.

* Hedge rates are tracked as an indication of earnings, to assess the size of future volumes already tied up with counterparties, and the value of forward production in the wholesale market.

* E.ON had sold 2017 nuclear output at 32 euros and 2016 output at 37 euros.

* E.ON peer Uniper, in which E.ON holds a 47 percent stake, on Tuesday already presented some of its European hydropower and nuclear hedge rates, also below current prices.

* Its managers said in analyst and press calls that locked-in forward contracts can be rewound if market conditions change.

* Germany’s 2018 delivery contract, the European power benchmark, on Tuesday hit a new 40-month high of 37.53 euros.

* It stands one third above its 2017 low at the end of March, having been driven by repeated reports of French nuclear supply tightness, thermal capacity closures, soaring global coal prices, and a booming economy. ($1 = 0.8620 euros) (Reporting by Vera Eckert; Editing by XXX)

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