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Energy Studies | 31st Jan, 2023

What is the best time to close Power Purchase Agreements in Spain?


An exploratory analysis of the Spanish Futures market.

Reading time : 1 min

Written by

Tomás Oliveira

To answer this question, we took the daily Futures data of Spain between 2015 and 2022, computed the average values for all available years, and aggregated the data into quarters. Futures are a good market-driven forecast on the development of electricity price expectations.

 

Bar chart with Spain Futures data from OMIP

Observations


1. The starting months of the year had a tendency of having lower average Futures values than the ending ones.
2. On average Q1 had the lowest and Q4 the highest Futures values.
3. Points 1 and 2 could be explained due to high wind and hydropower generations during winter months leading to lower electricity price expectations.

 

Bar chart with Spain Futures data from OMIP

Conclusion

If you can choose the timing of closing your Power Purchase Agreement in Spain, chances are, that you will get higher prices later in the year than at the beginning of the year.

 

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