Tag Archives: forward

Phasing out the Conventional Forward model for DE & FR

MKonline will phase out its Conventional Forward model for the continental areas Germany and France.
Since 2011 the Conventional Forward model for Germany and France has delivered reliable results for our forward analysis. However, we believe that we can further enrich our analysis with the new Complete Forward model, which allows coverage of more price areas, consistent handling of cross-border flows and more frequent updates. Here you find more details about the model concept. Please feel free to contact us for more information.

Continue reading Phasing out the Conventional Forward model for DE & FR

What is Complete Forward?

The model concept

Complete Forward is the name of Mkonline’s medium term price forecast for all traded power-products in Europe, from 2 weeks up to 4 years ahead.

We use a proprietary model to forecast the entire price formation, including generator dispatch and the power flow between the interlinked power markets. At outset, Mkonline covered 4 markets, DE, FR, NL, and BE. The final aim is to offer a pan European coverage of all relevant forward markets.

Model update

Setting out the forward forecast is updated every morning, quantifying the effect of recent changes in fuel/carbon costs and latest weather forecasts on price, dispatch and exchange. In addition, each week the assumptions concerning generation capacities etc. are revised.

However, gaining experience, we aim to increase the update frequency and finally support a continuous updated forward forecasts, in line with the update frequency of our spot forecasts.
Follow the upgrades of Complete Forward here

What is shown?

So far Complete Forward offers the following forecast and data monitoring pages:

  • Price by Products (Price forecast for each relevant product, comparison to market – bull/bear signal, shift in forecast, SRMC of gas and coal), see chart below
  • Power Balance (comprehensive overview of demand and supply forecast aggregated by generation category)
  • Exchange (Total exchange and exchange by country)
  • Assumptions (Overview of exogenous input and capacity assumptions)

Some comments on the model

The forward model was developed in a sophisticated commercial simulation environment. It features unit commitment and economic dispatch of comprehensive thermal-based power systems. The model utilizes a broad data input, ranging from daily updated fundamental forecasts to generator specific technical parameters, including:

  • Weather-driven fundamentals based on MKonline’s W2F system (Weather-To-Fundamental) system.
  • Fuel and emission costs, currency exchange rate.
  • Cross-border capacity assumptions.
  • Available generation capacity based on Urgent Market Messages (UMM) and maintenance plans.
  • Detailed description of each power plant by means of technical parameters and constraints (e.g., plant efficiency, max capacity, minimum stable level, ramping rate, cost variables). At outset the system entails about 1000 plants.
  • Cross-border flow – to and from – adjoining market that are not yet included in the model. At outset these were, UK, ES, IT, CH, AT, PL, CZ, DK1, DK2, SE4, and NO2).

If you have any questions, feel free to send an email to

Eylert Ellefsen – Head of Continental Analysis
E-mail: eel@mkonline.com

 

Example of Price Table Germany – temporary simulation

Complete Forward Web page 1

Changelog Complete Forward

Complete Forward is a large model concept that contains an abundance of details. Furthermore, we add small and large upgrades frequently.

We have set up this blog post to facilitate project transparency. It contains dates for changes,  what’s updated and why, as well as short explanations for the changes.

We have added some links to MKonline. If you do not have access to the page, please feel free to apply for a free trial here. 

List of updates

  • Pending  Launched downloadable files on our DataCenter.
  • 19.10.16 Official launch data sett to 1.November
  • 29.09.16 Heads up: New Forward to be launch

 

Heads up: New forward product to be launched

We are proud to announce that MKonline introduces a brand new system for medium term forecasting. We expect to launch for test users during the week starting with 24.October 1.November 2016.

Beyond forecasting power prices for all traded power-products, the system also offer comprehensive forecasts for all fundamentals and power flow to adjoining markets.

We start by covering the markets for DE, FR, NL, and BE. However, we are committed to add more countries soon. Our end goal is to offer a pan European coverage of forward markets, similar to what we offer with InstantSpot.

A detailed description of the model will follow in a later blog post.

Do I need to change my work habit?

Not at all! For a period, we will run the current forward model, named Conventional Forward,  in parallel with the new one. In due time we will announce shut down date for the Conventional Forward model, starting with DE and FR in December. This will ease the transition for you and allow us time to complete the presentation build for the new forward product.

Note however, in order to distinguish the two models we have renamed the current Forward to “Conventional Forward” and name the new product “Complete Forward”. The name is chosen simply because the new system offers forecast not only on prices but on a broad field of variables linked to price formation.

Model update, every day

The new forward pages are updated every morning, quantifying the effect of recent changes in fuel costs and latest weather forecasts on price, dispatch and exchange. In addition, each week the assumptions concerning production capacities etc are revised factored in to the forecast.

However, gaining experience, we aim to increase the update frequency and finally support a continuous updated forward picture for Europe, in line with the update frequency of our spot forecasts.

What is shown?

As we set out, Complete Forward offers four new web pages. However, in line with MKonline’s strive to develop we will extend the content substantially and also improve on the initial pages. The four new pages are:

Price by products (Price forecast for each relevant product, calculation of difference to market (bull/bear signal) , shift in forecast and marginal fuel cost)
Power Balance (Comprehensive overview of the power mix, demand and power exchange)
Exchange (Net total exchange and exchange by country, Monthly resolution )
Assumptions (Overview of exogenous input to the model)

What to expect from us?

As indicated, the four countries covered and new web pages included at the outset is only the beginning. We aim to keep you updated on changes and additional services we make for Complete Forward on a dedicated changelog.

Feedback would be appreciated.

 

German power market – bearish August and profitable MKonline recommendations

German Cal 16 has declined approximately 1.5 €/MWh since the beginning of August as a result of the bearish coal market. In addition, the CO2 market turned bearish as well in the middle of August. The attached chart from Platts shows the development of German power and coal ARA the last 3 weeks.

The main explanation for the bearish coal market is reduced – Chinese imports of steam-coal are down nearly 35% since 2014.

Continue reading German power market – bearish August and profitable MKonline recommendations