E.ON sells German nuclear power ahead at above-market prices

FRANKFURT (Reuters) - German utility E.ON EONGn.DE said on Wednesday it has sold forward 73% of its 2021 nuclear power generation and 46% of its 2022 output at prices above the current wholesale market, raising earnings prospects from that segment.

FILE PHOTO: Electric car is charged at the charging station at the front of the German utility E.ON headquarters in Essen, Germany, May 9, 2018. REUTERS/Wolfgang Rattay

The company has to date also sold some 91% of output in the current year from reactors at its Preussen Elektra unit, it showed in presentation slides on reporting second-quarter financial results.

Production in 2020 was sold at 46 euros ($53.93) per megawatt hour (MWh) after 2019’s locked-in price had been 33 euros.

Hedge rates of forward production volumes are tracked by wholesale market traders and analysts to assess volumes tied up with counterparties and the value of future production.

As for achieved prices in the forward sales, both 2021 and 2022 were locked in at 45 euros, the E.ON slides showed.

By comparison, over-the-counter prices for German round-the-clock power from all conventional energy sources to be delivered in 2021 traded at 39.9 euros/MWh TRDEBYZ1 on Wednesday morning, according to Refinitiv Eikon data.

Baseload delivery for 2022 was untraded, having closed at 44.2 euros TRDEBYZ2.

Power curve prices slumped to two-year lows during the lockdown in March and April as the coronavirus crisis sapped demand.

However, the 2021 benchmark position currently stands some 15% above the year-lows in late March as hopes of an economic recovery boosted prospects. [EL/DE]

E.ON retained its Brokdorf, Grohnde and Isar 2 reactors after an asset swap deal in which it transferred minority interests held by Preussen Elektra in the RWE-operated RWEG.DE Emsland and Gundremmingen C plants.[POWER/DE]

Rival Uniper UN01.DE on Tuesday also published some nuclear and hydropower hedging results as part of its earnings report.

Reporting by Vera Eckert, Editing by Sherry Jacob-Phillips